Comprehensive Annual Financial Report and Audited Financial Statements – Volume 7 of 7
Fiscal Year Ended June 30, 2013
Prepared by: The Finance Department of Albuquerque Public Schools P. O. Box 25704 Albuquerque, New Mexico 87125 www.aps.edu
STATISTICAL SECTION (UNAUDITED) Statistical Section Narrative This section of Albuquerque Public School’s Comprehensive Annual Financial Report presents detailed information in a context for understanding this year’s financial statements, note disclosures and supplementary information. Unless otherwise noted, the information in these tables is derived from District annual financial reports for the relevant year. This information is unaudited.
Financial Trends These schedules contain information to help the reader understand how the District’s financial performance has changed over time. All of these schedules are presented for ten years.
Schedule 1-2 Information about Net Position Schedule 3 Changes in Net Position Schedule 4 Fund Balances, Governmental Funds Schedule 5 Changes in Fund Balances, Governmental Funds
Revenue Capacity These schedules present information to help the reader assess the District’s most significant local revenue source, property taxes.
Schedule 6-8 Information about Assessed Property Values Schedule 9-10 Information about Tax Rates Schedule 11 Principal Property Tax Payers Schedule 12 Property Tax Levies and Collections
Debt Capacity These schedules preset information to help the reader assess the District’s outstanding debt and its ability to absorb additional debt in the future.
Schedule 13 Outstanding Debt Schedule 14 Direct and Overlapping Debt Schedule 15 Debt Service Requirements Schedule 16 Legal Debt Margin
Operating Data These schedules present operating data to help understand how the information in the District’s financial report relates to the services it provides.
Schedule 17 Full-Time Equivalent Employees by Function Schedule 18 Student Enrollment Schedule 19 State Equalization Schedule 20 District Facilities
Demographic and Economic Information These schedules present demographic and economic information intended to help the reader understand the socioeconomic environment within which the Distract operates.
Schedule 21-22 Population Schedule 23-24 Employment Schedule 25-26 Income Schedule 27 New Mexico Gross Receipts Tax
Page 220 Schedule 1 ALBUQUERQUE PUBLIC SCHOOLS FINANCIAL TREND DATA
NET ASSETS BY COMPONENT‐10 YEARS
Fiscal Year Invested in Ending capital assets, Restricted for Restricted for Total June 30, net of related debt debt service capital projects Unrestricted Net Position 2013$ 770,843,356 $ 67,283,741 $ 148,446,159 $ 88,024,887 $ 1,074,598,143 2012 713,057,881 64,869,572 115,388,689 65,141,990 958,458,132 2011 767,159,510 55,519,009 91,722,842 54,561,162 968,962,523 2010 759,437,702 52,654,208 53,684,924 47,911,727 913,688,561 2009 695,519,187 26,589,278 46,373,110 64,783,197 833,264,772 2008 556,657,856 34,882,640 124,082,909 63,567,886 779,191,291 2007 473,280,408 64,055,834 142,492,688 49,230,927 729,059,857 2006 444,509,087 24,563,628 110,229,634 10,937,166 590,239,515 2005 412,885,473 21,488,614 105,349,657 22,778,457 562,502,201 2004 428,905,577 19,804,338 94,099,036 37,610,165 580,419,116
Page 221 Schedule 2 ALBUQUERQUE PUBLIC SCHOOLS FINANCIAL TREND DATA
INFORMATION ABOUT NET POSITION ‐ 10 YEARS
2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Assets Cash and investments$ 370,208,567 $ 365,529,765 $ 414,968,260 $ 295,810,396 $ 386,123,427 $ 317,072,060 $ 281,768,584 $ 224,542,623 $ 245,238,313 $ 218,035,700 Other current assets 35,023,245 29,031,255 26,409,215 30,513,468 24,522,705 38,650,481 34,816,355 17,655,487 16,056,609 17,413,787 Capital assets net of depreciation 1,278,682,736 1,206,323,859 1,235,405,051 1,170,732,209 1,031,526,696 756,445,732 637,745,969 571,900,700 556,861,978 549,425,577 Other non‐current assets 23,588,028 32,555,155 28,175,964 26,356,338 20,516,565 23,279,518 54,762,090 17,318,205 143,758 13,471,012 Total Assets 1,707,502,576 1,633,440,034 1,704,958,490 1,523,412,411 1,462,689,393 1,135,447,791 1,009,092,998 831,417,015 818,300,658 798,346,076
Liabilities Accounts payable 3,747,565 2,424,617 2,583,010 4,746,490 4,552,438 778,186 3,930,776 5,372,936 7,588,852 5,521,446 Insurance reserves ‐short term 16,472,397 27,601,445 28,434,736 28,347,316 34,604,752 27,929,614 25,505,589 21,982,018 18,487,620 3,105,000 Current portion long term obligations 49,934,267 41,696,078 37,191,078 44,686,560 22,819,784 11,233,212 25,113,703 14,717,150 19,187,670 17,854,997 Other current liabilities 67,638,080 68,578,039 95,552,363 98,266,361 112,429,612 98,236,552 76,043,251 71,709,914 79,455,551 76,965,454 Total Current Liabilities 137,792,309 140,300,179 163,761,187 176,046,727 174,406,586 138,177,564 130,593,319 113,782,018 124,719,693 103,446,897
Compensated absences 2,589,529 2,556,910 2,574,378 2,655,259 2,995,000 2,413,000 2,423,695 3,149,276 2,750,429 2,143,063 Net OPEB Obligation 316,763 284,924 Bonds due in more than one year 478,901,539 514,696,835 556,392,912 419,253,663 448,818,225 205,998,813 139,351,858 112,674,463 121,581,835 106,840,000 Long term portion claims payable 13,304,293 17,143,054 13,267,490 11,768,201 3,204,810 9,667,123 7,664,269 11,571,743 6,746,500 5,497,000 Total long term Liabilities 495,112,124 534,681,723 572,234,780 433,677,123 455,018,035 218,078,936 149,439,822 127,395,482 131,078,764 114,480,063
Total Liabilities 632,904,433 674,981,902 735,995,967 609,723,850 629,424,621 356,256,500 280,033,141 241,177,500 255,798,457 217,926,960 Net Position Invested in Capital Assets 770,843,356 713,057,881 767,159,510 759,437,702 695,519,187 556,657,856 473,280,408 444,509,087 412,885,473 428,905,577 Restricted for Debt Service 67,283,741 64,869,572 55,519,009 52,654,208 26,589,278 34,882,640 64,055,834 24,563,628 21,488,614 19,804,338 Restricted for Capital Projects 148,446,159 115,388,689 91,722,842 53,684,924 46,373,110 124,082,909 142,492,688 110,229,634 105,349,657 94,099,036 Unrestricted 88,024,887 65,141,990 54,561,162 47,911,727 64,783,197 63,567,886 49,230,927 10,937,166 22,778,457 37,610,165 Total Net Position 1,074,598,143 958,458,132 968,962,523 913,688,561 833,264,772 779,191,291 729,059,857 590,239,515 562,502,201 580,419,116 Total Liabilities and Net Position $ 1,707,502,576 $ 1,633,440,034 $ 1,704,958,490 $ 1,523,412,411 $ 1,462,689,393 $ 1,135,447,791 $ 1,009,092,998 $ 831,417,015 $ 818,300,658 $ 798,346,076
Page 222 Schedule 3 ALBUQUERQUE PUBLIC SCHOOLS FINANCIAL TREND DATA
INFORMATION ABOUT CHANGES IN NET POSITION ‐ 10 YEARS
2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Expenses Instruction$ 415,372,893 $ 408,175,828 $ 422,142,550 $ 442,536,731 $ 441,808,481 $ 407,177,086 $ 403,090,377 $ 388,627,073 $ 386,584,814 $ 339,504,148 Instructional support 133,118,676 128,224,560 137,045,510 151,656,591 149,131,288 148,669,302 161,133,974 144,014,281 142,626,519 132,989,297 Administration 5,225,441 4,989,105 6,955,227 6,731,422 6,983,909 9,552,429 10,950,359 9,936,432 9,838,292 9,675,842 Business & support services 97,738,269 114,071,296 115,626,709 110,412,219 105,726,439 108,250,441 8,011,983 8,426,444 4,818,298 6,719,298 Operation & maintenance of plant 64,842,630 59,583,864 69,825,012 73,180,201 62,971,371 58,328,952 56,665,211 68,638,365 66,260,520 54,829,790 Student transportation 18,160,713 17,528,079 18,576,309 19,377,641 20,166,661 20,161,414 20,299,083 19,123,659 19,437,811 18,139,160 Food Services Operation 31,785,794 31,612,152 30,631,978 30,124,909 28,963,002 27,617,816 29,078,823 29,455,316 27,553,353 25,214,226 Facilities Supplies & Materials 61,072,398 45,588,525 75,278,234 30,086,679 40,152,729 48,362,756 31,864,317 48,402,587 90,923,121 73,520,717 Interest on long‐term debt 22,019,051 21,733,146 20,455,297 19,408,034 8,055,034 10,416,916 8,217,510 2,794,728 6,089,395 5,205,299 Depreciation ‐ unallocated 65,518,044 66,993,533 42,648,192 36,781,683 33,443,130 32,038,227 28,470,659 28,406,036 37,234,601 81,370 Total Expenses 914,853,909 898,500,088 939,185,018 920,296,110 897,402,044 870,575,339 757,782,296 747,824,921 791,366,724 665,879,147
Program Revenues Charges for Services Employee benefits 30,365,275 32,842,447 37,989,097 36,614,162 26,571,860 25,517,358 ‐ ‐ ‐ ‐ Food Services Operation 8,619,207 8,854,850 9,613,724 9,778,421 10,171,509 10,806,205 9,813,538 9,008,802 9,701,572 8,488,400 Other Charges for Services 8,437,980 9,292,479 8,476,284 6,439,687 2,978,611 2,017,129 2,059,044 1,796,268 3,756,109 1,932,236 Total Charges for Services 47,422,462 50,989,776 56,079,105 52,832,270 39,721,980 38,340,692 11,872,582 10,805,070 13,457,681 10,420,636 Operating Grants and Contributions 147,552,001 123,904,939 145,253,757 150,267,576 127,070,051 126,941,418 121,084,660 124,138,459 96,524,611 118,300,926 Capital Grants and Contributions 10,178,265 9,815,264 6,738,769 24,660,487 14,524,931 20,737,399 34,124,129 10,098,392 52,194,680 2,190,769 Total Program Revenues 205,152,728 184,709,979 208,071,631 227,760,333 181,316,962 186,019,509 167,081,371 145,041,921 162,176,972 130,912,331
Net (Expense) Revenue (709,701,181) (714,065,995) (731,113,387) (692,535,777) (716,085,082) (684,555,830) (590,700,925) (602,783,000) (629,189,752) (534,966,816) General Revenues Property taxes: Levied for general purposes 4,804,381 4,761,575 4,595,209 4,545,782 4,274,179 4,150,493 4,535,877 3,743,763 2,878,514 2,409,175 Levied for debt service 62,214,506 63,567,100 60,826,278 63,598,426 57,909,583 31,632,788 76,638,213 25,946,034 22,452,108 19,009,918 Levied for capital projects 83,689,294 80,270,401 89,380,289 88,276,942 80,323,366 79,191,888 58,771,935 71,757,176 67,365,948 45,490,804 PSCOC awards 82,925,067 ‐ 27,081,966 State equalization guarantee 590,190,332 583,644,192 601,789,251 610,595,016 621,262,717 607,660,123 576,123,653 518,914,097 498,194,327 464,176,747 Interest & investment earnings 611,473 345,439 636,130 697,319 4,733,832 9,789,023 14,593,278 7,537,291 3,738,658 2,859,640 Gain/loss on disposal of capital assets 179,810 18,847 12,352 585,604 2,499 9,612 (2,733,627) (302,440) 1,262,782 (680,611) Miscellaneous 1,226,329 2,292,502 2,065,874 4,660,477 1,652,384 2,253,337 1,591,938 2,924,393 15,380,500 16,879,772 Total General Revenues 825,841,192 734,900,056 786,387,349 772,959,566 770,158,560 734,687,264 729,521,267 630,520,314 611,272,837 550,145,445 Change in Net Position 116,140,011 21,109,947 55,273,962 80,423,789 54,073,478 50,131,434 138,820,342 27,737,314 (17,916,915) 15,178,629 Net Position Beginning * 958,458,132 937,348,185 913,688,561 833,264,772 779,191,294 729,059,857 590,239,515 562,502,201 580,419,116 565,240,487 Net Position Ending$ 1,074,598,143 $ 958,458,132 $ 968,962,523 $ 913,688,561 $ 833,264,772 $ 779,191,291 $ 729,059,857 $ 590,239,515 $ 562,502,201 $ 580,419,116
* 2012 Restatement due to accumulated depreciation adjustment Page 223 Schedule 4 ALBUQUERQUE PUBLIC SCHOOLS FINANCIAL TREND DATA
INFORMATION ABOUT FUND BALANCES ‐ TOTAL GOVERNMENTAL FUNDS ‐ 10 YEARS
2013 2012 2011 2010‐a) 2009 2008 2007 2006 2005 2004 General Fund Nonspendable for Inventory$ 1,889,540 $ 1,723,565 $ 2,470,561 $ 5,234,132 $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ Prepaids 50,000 50,000 350,000 409,900 ‐ ‐ ‐ ‐ ‐ ‐ Committed for Subsequent Year 20,000,000 20,000,000 20,000,000 15,496,460 ‐ ‐ ‐ ‐ ‐ ‐ Unassigned 12,877,023 7,255,891 4,628,744 (135,200) ‐ ‐ ‐ ‐ ‐ ‐
Reserved for: Inventory ‐ ‐ ‐ ‐ 3,246,252 3,375,704 2,852,461 2,549,870 2,561,760 2,452,871 Claims ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,001,000 2,259,000 2,601,000 Prepaids ‐ ‐ ‐ ‐ 350,000 ‐ ‐ ‐ ‐ ‐ Transportation 72,507 132,255 133,031 137,334 94,529 32,086 27,539 Instructional Materials 2,320,704 3,148,751 2,544,581 1,389,303 1,572,665 3,842,752 3,390,157
Unreserved Desig Sub Years ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,661,000 Unreserved, Undesignated ‐ ‐ ‐ ‐ 28,508,888 42,968,776 40,031,315 6,367,259 21,210,673 29,611,214
Total General Fund 34,816,563 29,029,456 27,449,305 23,398,503 35,386,146 49,022,092 44,410,413 14,585,323 29,906,271 39,743,781
Other Governmental Funds
Nonspendable for Inventory 1,500,176 1,564,992 1,663,487 1,383,981 ‐ ‐ ‐ ‐ ‐ ‐ Restricted for: Transportation ‐ (381) 3,302 ‐ ‐ ‐ ‐ ‐ ‐ ‐ Instructional Materials 1,635,847 321,585 1,027,817 ‐ ‐ ‐ ‐ ‐ ‐ ‐ Restricted by Grantor 8,208,556 8,229,283 7,819,138 7,385,993 ‐ ‐ ‐ ‐ ‐ ‐ Athletic Program 1,638,853 1,516,581 1,446,866 1,432,285 Capital projects 170,097,574 181,632,911 210,862,432 105,470,740 ‐ ‐ ‐ ‐ ‐ ‐ Debt Service Fund 68,314,017 63,696,205 56,731,992 51,764,922 ‐ ‐ ‐ ‐ ‐ ‐ Committed for Subsequent Year ‐ ‐ ‐ ‐ ‐ ‐ Assigned for Food Service 14,606,894 12,158,606 6,892,441 8,356,436 ‐ ‐ ‐ ‐ ‐ ‐
Reserved for inventory ‐ ‐ ‐ ‐ 1,354,308 1,550,845 1,211,157 969,393 884,565 969,392 Undesignated, reported in: Capital Projects ‐ ‐ ‐ ‐ 184,801,219 107,103,039 129,714,537 96,836,150 105,349,657 91,480,918 Special Revenue Funds ‐ ‐ ‐ ‐ 16,475,077 14,325,980 8,753,443 6,209,230 4,238,907 4,444,794 Debt Service ‐ ‐ ‐ ‐ 28,553,941 59,350,822 30,918,292 24,563,627 21,488,614 18,866,085
Total Other Governmental Funds 266,001,917 269,119,782 286,447,475 175,794,357 231,184,545 182,330,686 170,597,429 128,578,400 131,961,743 115,761,189
Total Governmental Funds $ 300,818,480 $ 298,149,238 $ 313,896,780 $ 199,192,860 $ 266,570,691 $ 231,352,778 $ 215,007,842 $ 143,163,723 $ 161,868,014 $ 155,504,970
(a‐ Page 224 2010 Restated per GASB 54 Schedule 5 ALBUQUERQUE PUBLIC SCHOOLS FINANCIAL TREND DATA
CHANGES IN FUND BALANCES ‐ TOTAL GOVERNMENTAL FUNDS ‐10 YEARS
2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 REVENUES Property taxes$ 152,527,631 $ 150,743,675 $ 149,975,114 $ 154,874,210 $ 147,341,169 $ 140,128,561 $ 101,805,469 $ 95,430,062 $ 94,789,047 $ 83,790,767 State grants 635,935,903 616,924,329 611,178,101 610,408,967 673,293,581 665,189,762 641,955,286 560,539,986 536,919,406 497,532,421 Federal revenue 111,845,678 100,290,970 140,297,917 166,598,485 86,751,992 85,790,846 85,592,891 83,744,579 91,838,164 87,136,020 Miscellaneous 17,594,336 18,747,003 22,823,646 29,998,914 17,617,131 19,865,011 17,535,758 17,539,053 16,385,084 15,444,897 Interest 531,251 290,832 540,432 578,512 4,168,638 8,498,690 12,091,225 3,547,876 3,755,089 2,682,339 Total revenues 918,434,799 886,996,809 924,815,210 962,459,088 929,172,511 919,472,870 858,980,629 760,801,556 743,686,790 686,586,444 EXPENDITURES Instruction 450,209,349 441,385,087 458,326,077 477,625,057 471,984,644 451,720,649 401,870,768 388,613,555 386,584,814 343,180,138 Instructional Support 143,819,675 138,240,865 147,918,426 163,768,858 158,466,246 147,877,967 160,185,240 144,027,608 142,626,519 133,186,808 Subtotal Administration 8,478,957 7,105,404 8,600,307 8,003,742 7,483,338 9,799,296 10,950,359 9,937,332 9,838,292 9,695,525 Business & Support Svcs 21,301,106 20,841,503 23,826,891 20,511,880 21,695,124 22,847,617 8,011,983 8,426,444 4,818,298 6,720,977
Operation & Maintenance of Plant 77,024,324 71,631,056 74,222,410 77,548,626 74,332,397 69,683,890 56,060,423 68,638,366 66,260,520 54,808,688 Student Transportation 18,989,915 18,351,779 18,624,007 19,465,567 20,937,785 20,181,283 20,299,083 19,123,659 19,437,811 18,141,381 Food Services Operations 33,584,832 33,225,335 32,491,526 32,117,386 30,298,675 29,118,076 29,078,823 29,455,316 27,553,353 25,461,539 Capital outlay, facilities supplies & materials 116,911,784 118,173,087 156,988,516 205,955,611 354,057,872 201,469,951 131,369,644 96,580,451 93,349,465 95,893,540
Debt service - Principal 49,781,791 34,986,791 43,366,791 21,726,791 88,846,792 24,931,791 14,316,229 19,283,387 13,680,000 24,910,000 Interest 22,703,410 21,849,824 19,115,337 18,046,115 11,351,158 3,347,228 5,590,483 2,794,728 6,089,395 5,205,299 Bond issuance costs 675,351 710,256 948,847 302,471 809,959 132,606 248,868 Total expenditures 943,480,494 906,500,987 984,429,135 1,045,072,104 1,240,263,990 981,110,354 837,981,903 786,880,846 770,238,467 717,203,895 Excess (deficiency) of revenues over (under) expenditures (25,045,695) (19,504,178) (59,613,925) (82,613,016) (311,091,479) (61,637,484) 20,998,726 (26,079,290) (26,551,677) (30,617,451)
Other Financing Sources (Uses) Operating Transfers - 279,721 Reimbursements to Grantors (210) (248,429) (349,653) (19,098) (7,317) Bond issuance premiums 5,442,512 - 6,397,495 1,984,283 9,616,709 2,982,420 1,350,955 Payments to escrow agents (32,310,000) - (9,270,000) (17,830,000) - (14,485,563) IRS Bond Subsidy 1,912,635 1,912,635 Proceeds from bond issues 13,000,000 - 168,600,000 14,300,000 336,700,000 75,000,000 63,980,000 7,375,000 32,635,000 10,050,000 Proceeds from refunding bonds 39,670,000 - 8,940,000 16,800,000 Total other financing sources (uses) 27,714,937 1,664,206 174,317,842 15,235,185 346,309,392 77,982,420 50,845,392 7,375,000 32,914,721 10,050,000 Net changes in fund balances 2,669,242 (17,839,971) 114,703,917 (67,377,831) 35,217,913 16,344,936 71,844,118 (18,704,290) 6,363,044 (20,567,451) Fund balances - beginning of year 298,149,238 313,896,777 199,192,860 266,570,691 231,352,778 215,007,842 143,163,724 161,868,014 155,504,970 176,072,421 Prior Period Restatement - 2,092,432 Fund balances - end of year$ 300,818,480 $ 298,149,238 $ 313,896,777 $ 199,192,860 266,570,691 $ 231,352,778 $ 215,007,842 $ 143,163,724 $ 161,868,014 $ 155,504,970
Debt service as percentage of noncapital expenditures 8.4% 6.9% 7.1% 4.6% 10.9% 3.5% 2.7% 3.1% 2.9% 4.6% Page 225 Schedule 6 ALBUQUERQUE PUBLIC SCHOOLS INFORMATION ON REVENUE CAPACITY
INFORMATION ABOUT ASSESSED VALUES ‐ 10 YEARS
2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Total Direct Tax Rate 10.641 10.656 10.650 10.651 10.636 10.575 10.585 8.494 8.429 8.490
Assessments Value of Land$ 5,906,813,865 $ 5,887,056,085 $ 6,706,951,740 $ 6,726,695,811 $ 6,769,211,315 $ 6,394,572,060 $ 5,693,080,262 $ 5,776,215,991 $ 5,910,054,482 $ 5,870,555,417 Improvements 11,130,654,783 11,195,706,123 11,058,299,018 11,369,298,821 10,320,388,566 9,813,287,143 8,877,313,998 8,159,042,246 7,365,803,112 6,855,027,472 Personal Property 417,744,022 418,705,974 438,643,661 465,300,720 461,036,145 431,496,787 409,343,511 404,069,803 412,569,191 442,981,800 Mobile Homes 48,209,149 49,764,320 51,782,208 54,246,774 51,821,632 52,449,749 58,217,349 57,352,512 60,064,833 67,502,318 Livestock 1,005,793 1,144,286 1,225,460 1,324,108 1,253,629 1,571,404 1,493,732 1,387,389 1,290,106 1,254,745 Assessor's Total Valuation $ 17,504,427,612 $ 17,552,376,788 $ 18,256,902,087 $ 18,616,866,234 $ 17,603,711,287 $ 16,693,377,143 $ 15,039,448,852 $ 14,398,067,941 $ 13,749,781,724 $ 13,237,321,752 Less Exemptions Head of Family $ 198,426,899 $ 199,111,272 $ 196,472,571 $ 187,188,776 $ 185,670,083 $ 185,854,910 $ 185,565,058 $ 184,348,689 $ 187,479,433 $ 190,092,726 Veterans 262,668,629 255,765,498 246,647,703 241,032,241 222,996,269 215,218,273 203,541,976 177,948,725 140,327,537 69,883,565 Other 2,898,393,631 2,892,645,981 3,634,036,123 3,510,686,030 3,428,163,155 3,346,344,712 3,017,608,941 3,004,512,849 3,607,018,736 3,612,970,838 Total Exemptions $ 3,359,489,159 $ 3,347,522,751 $ 4,077,156,397 $ 3,938,907,047 $ 3,836,829,507 $ 3,747,417,895 $ 3,406,715,975 $ 3,366,810,263 $ 3,934,825,706 $ 3,872,947,129
Assessors Net Valuation $ 14,144,938,453 $ 14,204,854,037 $ 14,179,745,690 $ 14,677,959,187 $ 13,766,881,780 $ 12,945,959,248 $ 11,632,732,877 $ 11,031,257,678 $ 9,814,956,018 $ 9,364,374,623 Central Assessed 501,031,823 498,742,594 489,869,794 422,159,016 477,970,749 478,319,628 446,489,372 420,270,507 432,720,216 432,414,140
Total Assessed Valuation $ 14,645,970,276 $ 14,703,596,631 $ 14,669,615,484 $ 15,100,118,203 $ 14,244,852,529 $ 13,424,278,876 $ 12,079,222,249 $ 11,451,528,185 $ 10,247,676,234 $ 9,796,788,763
2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Residential$ 10,734,595,776 $ 10,628,874,088 $ 10,566,359,915 $ 10,775,752,995 $ 10,278,917,835 $ 9,496,659,135 $ 8,639,709,179 $ 7,919,792,463 $ 7,323,681,328 $ 6,971,908,964 Non-Residential 3,911,374,500 4,074,722,54 3 4,103,114,03 4 4,324,365,20 8 3,965,934,69 4 3,685,873,37 6 3,439,513,070 3,531,735,72 2 2,923,994,90 7 2,824,879,79 9 Total$ 14,645,970,276 $ 14,703,596,631 $ 14,669,473,949 $ 15,100,118,203 $ 14,244,852,529 $ 13,182,532,511 $ 12,079,222,249 $ 11,451,528,185 $ 10,247,676,234 $ 9,796,788,763
Cross County Assessed Valuation 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Bernalillo County $ 14,303,913,042 $ 14,363,716,915 $ 14,297,609,856 $14,734,387,233 $13,892,625,134 $ 12,872,512,863 $ 11,803,726,360 $ 11,203,526,789 $ 10,048,325,370 $ 9,609,030,639 (1) Sandoval County 342,057,234 339,879,716 371,864,093 365,730,970 352,227,395 310,019,648 275,495,889 248,001,396 199,350,864 187,758,124 Total$ 14,645,970,276 $ 14,703,596,631 $ 14,669,473,949 $ 15,100,118,203 $ 14,244,852,529 $ 13,182,532,511 $ 12,079,222,249 $ 11,451,528,185 $ 10,247,676,234 $ 9,796,788,763
(1) Portion of Corrales located in Sandoval County (2A-In Corrales & 2AC - Albuquerque/Corrales). Source: Official Statement Dated August 21, 2013
Page 226 Schedule 7 ALBUQUERQUE PUBLIC SCHOOLS INFORMATION ON REVENUE CAPACITY
INFORMATION ABOUT ASSESSED VALUATION ‐ 10 YEARS
HISTORY OF ASSESSED VALUATION BY ENTITY
Following is a ten year history of assessed valuation for the District campared with Bernalillo County and Sandoval County
Albuquerque Bernalillo Sandoval Tax Year School District County County
2012$ 14,645,970,276 $ 14,394,423,187 $ 3,180,127,526 2011 14,703,596,631 14,452,760,775 3,222,126,760 2010 14,669,473,949 14,014,237,067 3,354,830,744 2009 15,100,118,203 14,823,104,676 3,432,805,105 2008 14,244,852,529 13,976,092,003 3,259,727,705 2007 13,182,532,511 12,948,307,067 2,862,819,902 2006 11,926,144,157 11,715,540,463 2,080,852,068 2005 11,451,528,185 11,260,432,703 1,786,809,118 2004 10,236,146,834 9,684,259,433 1,589,098,941 2003 9,796,788,763 9,660,815,811 1,513,706,569
Source: Official Statement Dated August 21, 2013
Page 227 Schedule 8 ALBUQUERQUE PUBLIC SCHOOLS INFORMATION ON REVENUE CAPACITY
INFORMATION ABOUT ASSESSED VALUATION - 10 YEARS
Tax Assessed % Year Valuation Growth 2012$ 14,645,970,276 -0.4% 2011 14,703,596,631 0.2% 2010 14,669,473,949 -2.9% 2009 15,100,118,203 6.0% 2008 14,244,852,529 8.1% 2007 13,182,532,511 9.1% 2006 12,079,222,249 5.5% 2005 11,451,528,185 11.7% 2004 10,247,676,234 4.6% 2003 9,796,788,763 3.3% 2002 9,482,500,353
Average Annual Growth Rate 4.5%
Source: Official Statement Dated August 21, 2013
Page 228 Schedule 9 ALBUQUERQUE PUBLIC SCHOOLS INFORMATION ON REVENUE CAPACITY
INFORMATION ABOUT TAX RATES ‐ 10 YEARS
Following is a ten year history of APS School tax rates
Operational Two Mill Levy HB 33 Levy Debt Service Total Non- Non- Non- GO Ed Tech Combined Non- Tax Year Residential Residential Residential Residential Residential Residential Bonds Notes Debt Service Residential Residential 2012 $0.274 $0.500 $2.000 $2.000 $3.874 $4.344 $3.416 $0.899 $4.315 $10.463 $11.159 2011 0.264 0.500 2.000 2.000 3.874 4.344 4.020 0.294 4.314 10.452 11.158 2010 0.256 0.500 2.000 2.000 3.874 4.344 4.317 0.000 4.317 10.447 11.161 2009 0.244 0.500 2.000 2.000 3.874 4.344 4.316 0.000 4.316 10.434 11.160 2008 0.238 0.500 1.999 2.000 3.812 4.344 4.304 0.000 4.304 10.353 11.148 2007 0.238 0.500 2.000 2.000 3.813 4.344 4.308 0.000 4.308 10.359 11.152 2006 0.241 0.500 1.994 2.000 3.862 4.344 2.167 0.000 2.167 8.264 9.011 2005 0.242 0.460 2.000 1.841 3.874 4.344 2.162 0.000 2.162 8.278 8.807 2004 0.240 0.500 2.000 2.000 3.874 4.344 2.166 0.000 2.166 8.280 9.010 2003 0.239 0.500 2.000 2.000 3.874 4.344 2.162 0.000 2.162 8.275 9.006
Source: Official Statement Dated August 21, 2013
STATEWIDE AVERAGE:
Operational Two Mill Levy HB 33 Levy Total Non- Non- Non- GO Non- Tax Year Residential Residential Residential Residential Residential Residential Bonds ETNs Residential Residential
2012 $0.323 $0.474 $1.850 $1.874 $0.417 $0.437 $4.938 $0.370 $7.741 $7.931
Source: New Mexico Public Education Department
Page 229 Schedule 10 ALBUQUERQUE PUBLIC SCHOOLS INFORMATION ON REVENUE CAPACITY
INFORMATION ABOUT TAX RATES ‐ 10 YEARS
Article VIII, section 2, of the New Mexico Constitution limits the total ad valorem taxes for operatonal purposes levied by all overlapping governmental units within in the District to $20.00 per $1,000 of assesssed limitation does not apply to levies for public debt and levies for additional taxes if authorized at an election by a majority of the qualified voters of the juriscition voting on the question. The following table summa situation on residential property in Bernalillo County for the tax year 2012 and the previous nine years. A high level of taxation may impact the District's ability to repay the Notes and Bonds.
Bernalillio County Within 20 Mill Limit for General Purposes
Total Levy 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 State of New Mexico $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 Bernalillo County 7.208 6.866 6.665 6.340 6.184 6.183 6.113 6.131 7.031 7.007 City of Albuquerque 6.544 6.544 6.389 6.072 3.971 2.970 3.012 3.028 3.019 3.019 AMAFCA (1) 0.176 0.170 0.165 0.165 0.165 0.167 0.178 0.180 0.183 0.186 Albuquerque MSD # 12 0.274 0.264 0.256 0.244 0.238 0.238 0.241 0.242 0.240 0.239 Total $14.202 $13.844 $13.475 $12.821 $10.558 $9.558 $9.544 $9.581 $10.473 $10.451
Over 20 Mill Limit - Interest, Principal, Judgment, etc.
State of New Mexico $1.360 $1.362 $1.530 $1.150 $1.250 $1.221 $1.291 $1.234 $1.028 $1.520 Bernalillo County 0.910 1.010 0.669 0.994 0.995 1.004 1.098 1.149 1.169 1.147 City of Albuquerque 4.976 4.976 4.976 4.976 6.976 7.976 7.976 7.976 7.976 7.976 AMAFCA (1) 0.675 0.675 0.675 0.675 0.675 0.675 0.675 0.675 0.675 0.675 Albuquerque MSD #12 10.189 10.188 10.191 10.190 10.115 10.121 8.023 8.036 8.040 8.036 UNM Hospital 6.400 6.400 6.400 6.400 6.401 6.400 6.482 6.500 6.500 6.500 Central New Mexico Community College 3.344 3.237 3.158 3.046 2.990 2.992 3.027 3.038 3.019 3.011 Total $27.854 $27.848 $27.599 $27.431 $29.402 $30.389 $28.572 $28.608 $28.407 $28.865
TOTAL LEVY
City of Albuquerque 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 State of New Mexico $1.360 $1.362 $1.530 $1.150 $1.250 $1.221 $1.291 $1.234 $1.028 $1.520 Bernalillo County 8.118 7.876 7.334 7.334 7.179 7.187 7.211 7.280 8.200 8.154 City of Albuquerque 11.520 11.520 11.365 11.048 10.947 10.946 10.988 11.004 10.995 10.995 AMAFCA (1) 0.851 0.845 0.840 0.840 0.840 0.842 0.853 0.855 0.858 0.861 Albuquerque MSD #12 10.463 10.452 10.447 10.434 10.353 10.359 8.264 8.278 8.280 8.275 UNM Hospital 6.400 6.400 6.400 6.400 6.401 6.400 6.482 6.500 6.500 6.500 Central New Mexico Community College 3.344 3.237 3.158 3.046 2.990 2.992 3.027 3.038 3.019 3.011
Total Residential $42.056 $41.692 $41.074 $40.252 $39.960 $39.947 $38.116 $38.189 $38.880 $39.316 Total Non-Residential in $45.648 $45.651 $45.480 $45.424 $45.613 $45.692 $44.749 $42.493 $44.377 $44.843
Village of Corrales Residential $30.816 $28.859 $28.406 $30.902 $31.209 $31.449 $29.065 $29.753 $28.840 $30.399 Non-Residential $37.368 $34.228 $32.524 $37.197 $37.361 $38.471 $36.782 $34.938 $36.143 $35.578
Village of Los Ranchos Residential $30.536 $30.273 $29.857 $29.278 $29.173 $29.159 $26.275 $26.330 $27.027 $27.460 Non-Residential $36.353 $35.076 $34.948 $34.818 $35.093 $35.172 $32.100 $30.170 $32.587 $33.323 Page 230
(1) Albuquerque Metropolitan Arroyo Flood Control Authority.
Source: Official Statement Dated August 21, 2013 Schedule 11 ALBUQUERQUE PUBLIC SCHOOLS INFORMATION ON REVENUE CAPACITY
INFORMATION ABOUT PRINCIPAL REVENUE PAYERS
2012 % of 2003 Assessed % of Taxpayer Business Valuation Total A.V. Taxpayer Business Valuation Total A.V. Public Service Co. of New Mexico Electric Utility $154,384,030 1.05% Qwest Communications Telecommunications $100,941,715 0.99% Century Link Telecommunications 78,581,059 0.54% PNM Electric Electric Utility 121,419,009 1.19% Public Service Co. of New Mexico Gas Utility 42,183,531 0.29% PNM Gas Services Gas Utility 26,678,211 0.26% Comcast Cable Provider 34,501,285 0.24% Simon Property Group Cottonwood Shopping Mall 20,483,754 0.20% Verizon Wireless Communications 25,541,916 0.17% Southwest Airlines Airline 21,089,467 0.21% Southwest Airlines Airline 19,135,077 0.13% Comcast Cablevision Cable Provider 21,694,707 0.21% Simon Property Group Retail 15,962,333 0.11% Heitman Properties of NM Coronado Shopping Mall 19,111,489 0.19% AHS Medical Center Medical 12,051,009 0.08% Crescent Real Estate Hyatt Hotel 15,965,071 0.16% ABQ Uptown LLC Retail 10,097,800 0.07% Verizon Wireless Wireless Communications 14,715,110 0.14% Cricket Telecommunications 9,842,230 0.07% GCC Rio Grande Inc. Real Estate 17,666,667 0.17% Top Ten Centrally and Locally Assessed Values $402,280,270 2.75% Top Ten Centrally and Locally Assessed Values $379,765,200 3.72%
Source: Official Statement Dated August 21,2013
Total 2012 Assessed Valuation $14,645,970,276 Total 2003 Assessed Valuation $9,796,788,763
Page 231 Schedule 12 ALBUQUERQUE PUBLIC SCHOOLS INFORMATION ON REVENUE CAPACITY
INFORMATION ABOUT TAX LEVIES AND COLLECTIONS ‐ 10 YEARS
Bernalillo County Net Taxes Current Current/ Current/Delinquent Tax Fiscal Charged to Current Tax Collections as a Delinquent Tax Collections as a Year Year Treasurer Collections (1) % of Net Levied Collections (2) % of Net Levied 2012 12/13 $601,844,884 $580,736,950 96.49% $580,736,950 96.49% 2011 11/12 593,019,949 570,354,626 96.18% 583,066,862 98.32% 2010 10/11 585,432,230 559,806,155 95.62% 578,868,131 98.88% 2009 09/10 594,170,426 561,435,327 94.49% 584,186,271 98.32% 2008 08/09 565,045,755 541,204,499 95.78% 562,335,609 99.52% 2007 07/08 533,488,014 513,363,469 96.23% 530,519,998 99.44% 2006 06/07 459,924,205 443,198,371 96.36% 457,738,164 99.52% 2005 05/06 427,818,360 411,172,774 96.11% 426,755,529 99.75% 2004 04/05 400,292,096 383,127,289 95.71% 398,976,189 99.67% 2003 03/04 386,695,130 375,332,266 97.06% 385,425,233 99.67%
(1) As of June 30 of each fiscal year. (2) Fiscal year 2012-13, as of June 2013 Source: Official Statement Dated August 21, 2013 Sandoval County Net Taxes Current Current/ Current/Delinquent Tax Fiscal Charged to Current Tax Collections as a Delinquent Tax Collections as a Year Year Treasurer Collections (1) % of Net Levied Collections (2) % of Net Levied 2012 12/13 $114,396,660 $109,098,898 95.37% $109,098,898 95.37% 2011 11/12 111,924,650 107,182,149 95.76% 109,640,881 97.96% 2010 10/11 113,276,279 107,439,020 94.85% 112,285,005 99.12% 2009 09/10 110,756,928 104,094,225 93.98% 109,891,186 99.22% 2008 08/09 87,852,988 81,821,415 93.13% 87,534,928 99.64% 2007 07/08 75,464,680 70,795,219 93.81% 74,173,559 98.29% 2006 06/07 61,559,342 56,076,117 91.09% 58,771,924 95.47% 2005 05/06 50,318,727 48,414,225 96.22% 50,578,473 100.52% 2004 04/05 45,070,232 43,062,828 95.55% 44,974,285 99.79% 2003 03/04 41,186,554 39,837,804 96.73% 41,090,820 99.77% (1) As of June 30 of each fiscal year. (2) Fiscal year 2012-13, as of June 2013 Source: Official Statement Dated August 21, 2013 Page 232 Schedule 13 ALBUQUERQUE PUBLIC SCHOOLS
DEBT CAPACITY INFORMATION
Outstanding Debt at June 30, 2013
Original Amount Final Series Issued Maturity Principal Outstanding 2001 GOB$ 50,850,000 8/1/2016 $ - 2004 GOB 28,010,000 8/1/2020 750,000 2004 QZAB 4,625,000 8/1/2020 1,668,825 2005 GOB 21,375,000 8/1/2014 - 2006 QZAB 7,160,000 8/1/2020 2,994,610 2006C GOB 10/2006 63,980,000 8/1/2021 11,760,000 2007 GOB 12/2007 75,000,000 8/1/2022 47,450,000 2008B GOB 134,000,000 8/1/2023 110,000,000 2009 General Obligation Bonds (2009 124,700,000 8/1/2022 91,600,000 2009C QSCB 14,300,000 8/1/2024 14,300,000 2009D Refunding 16,800,000 8/1/2018 14,545,000 2010A GOB Regular Bonds 85,410,000 8/1/2021 77,400,000 2010B GOB QSCB 32,690,000 8/1/2027 32,690,000 2010C GOB BAB 31,900,000 8/1/2024 31,900,000 2011 GOB Refunding 8,940,000 8/1/2016 6,020,000 2011 Education Technology Notes 18,600,000 8/1/2015 14,310,000 2012 Refunding 39,670,000 8/1/2021 39,670,000 2012 Education Technology Notes 13,000,000 8/1/2017 13,000,000 $ 771,010,000 $ 510,058,435
Source: APS Financial Report-Note 8
Page 233 Schedule 14 ALBUQUERQUE PUBLIC SCHOOLS DEBT INFORMATION
Statement of Estimated Direct and Overlapping Debt
2013 Preliminary G/O Debt Percent Entity Assessed Value Outstanding Applicable Amount State of New Mexico $54,288,948,607 $372,700,000 26.694% $99,489,537 City of Albuquerque 11,735,108,416 395,542,916 100.00% 395,542,916 Bernalillo County 14,243,481,786 116,105,000 98.28% 114,113,661 Sandoval County 3,143,638,178 16,490,000 2.33% 384,963 Central New Mexico Community College 16,589,690,590 53,530,000 98.30% 52,619,990 Village of Los Ranchos 225,104,345 3,400,000 100.00% 3,400,000 AMAFCA 13,712,145,152 30,625,000 100.00% 30,625,000 S. Sandoval County AFCA 2,491,238,238 25,770,000 2.31% 595,287 (1) (2) (1) (2) Albuquerque MSD #12 14,492,037,500 501,915,000 100.00% 501,915,000 Total Direct & Overlapping Debt $1,198,686,354
Ratio of Estimated Direct & Overlapping Debt to 2013 Preliminary Assessed Valuation: 8.27% Ratio of Estimated Direct & Overlapping Debt to 2013 Preliminary Actual Valuation: 2.24% Per Capita Direct & Overlapping Debt: $1,786.70
Source: Official Statement Dated August 21, 2013
Page 234 Schedule 15 ALBUQUERQUE PUBLIC SCHOOLS
DEBT CAPACITY INFORMATION
Debt Service Requirements to Maturity
General Obligation Bonds Fiscal Year Ending June 30, Principal Interest Total Debt Service 2014 35,371,792 18,487,512 53,859,304 2015 36,761,792 17,175,837 53,937,629 2016 37,481,792 15,813,088 53,294,880 2017 37,716,792 14,386,138 52,102,930 2018 37,841,792 12,875,038 50,716,830 2019-2023 206,684,475 38,715,593 245,400,068 2024-2029 90,890,000 6,473,875 97,363,875 Totals$ 482,748,435 $ 123,927,081 $ 606,675,516
Educational Technology Notes Fiscal Year Ending June 30, Principal Interest Total Debt Service 2014 11,915,000 684,850 12,599,850 2015 5,745,000 440,025 6,185,025 2016 5,750,000 190,750 5,940,750 2017 1,950,000 43,750 1,993,750 2018 1,950,000 14,625 1,964,625 Totals$ 27,310,000 $ 1,374,000 $ 28,684,000
Source: APS Financial Statement
Page 235 Schedule 16 ALBUQUERQUE PUBLIC SCHOOLS DEBT INFORMATION
LEGAL DEBT MARGIN
Article IX, Section 11 of the New Mexico Constitution limits the powers of a District to incur general obligation debt extending beyond the fiscal year. The District can incur such debt for “the purpose of erecting, remodeling, making additions to and furnishing school buildings or purchasing or improving school grounds or purchasing computer software or hardware for student use in public school classrooms or any combination of these purposes” but only after the proposition to create any such debt has been submitted to a vote of the qualified electors of the District, and a majority of those voting on the question vote in favor of creating the debt. The total indebtedness of the District may not exceed six percent of the assessed valuation of the taxable property within the District as shown by the last preceding general assessment. The District also may create a debt by entering into a lease-purchase arrangement to acquire education technology equipment without submitting the proposition to a vote of the qualified electors of the District, but any such debt is subject to the 6% debt limitation. An issuance of refunding bonds does not have to be submitted to a vote of the qualified electors of the District. The preliminary valuation of taxable property within the District is $14,645,970,276 for the tax year 2012. Therefore, the maximum general obligation debt may not exceed $878,758,217
The calculation of the legal debt margin and ratio of outstanding debt to total personal income for the current and previous nine fiscal years is summarized below:
Ratio of Debt Total Net Fiscal Tax Outstanding Debt Service Fund Legal Debt Margin to Estimated Debt per 1 2 2 3 4 Year Year Assessed Value Debt Limit 6% Debt Balance Net Debt Margin Debt Limit Population5 Capita
2013 2012$ 14,645,970,276 $ 878,758,217 $ 510,058,435 $ 68,314,017 $ 441,744,418 $ 437,013,799 50%$ 901,700 $ 489.90 2012 2011 14,703,596,631 882,215,798 539,480,227 58,624,175 480,856,052 401,359,746 45% 887,320 $ 540.30 2011 2010 14,669,473,949 880,168,437 593,583,990 56,731,992 536,851,998 343,316,439 39% 887,568 $ 605.19 2010 2009 15,100,118,203 906,007,092 463,940,223 51,764,922 412,175,301 493,831,791 55% 855,604 $ 481.74 2009 2008 14,244,852,529 854,691,152 471,638,009 28,553,941 443,084,068 411,607,084 48% 844,699 $ 524.55 2008 2007 13,182,532,511 790,951,951 217,232,025 59,350,822 157,881,203 633,070,748 80% 833,232 $ 189.48 2007 2006 11,926,144,157 715,568,649 164,465,561 30,918,292 133,547,269 582,021,380 81% 816,808 $ 163.50 2006 2005 11,451,528,185 687,091,691 127,391,613 24,563,627 102,827,986 584,263,705 85% 797,788 $ 128.89 2005 2004 10,236,146,834 614,168,810 84,790,000 21,488,614 63,301,386 550,867,424 90% 780,142 $ 81.14 2004 2003 9,796,788,763 587,807,326 120,520,000 18,866,065 101,653,935 486,153,391 83% 765,629 $ 132.77 2003 2002 9,549,617,685 572,977,061 135,380,000 18,614,750 116,765,250 456,211,811 80% 753,492 $ 154.97
1- Source: Bernalillo and Sandoval Counties Assessor's Offices 2- Source: APS financial statements-Exhibit B-1, Schedule 13 3- Net debt equals outstanding debt less debt service fund balance 4- Legal debt margin equals debt limit less net debt 5- Estimated population from Schedule 22-Demographic Information-Page 392
Page 236 Schedule 17 ALBUQUERQUE PUBLIC SCHOOLS OPERATING DATA
FULL‐TIME EQUIVALENT EMPLOYEES BY FUNCTION LAST NINE FISCAL YEARS
2012 2011 2010 2009 2008 2007 2006 2005 2004
Instruction 8,034 7,791 7,674 7,556 7,824 7,881 7,938 7,836 7,730 Support Services 3,079 2,973 3,758 3,678 3,961 3,702 3,215 3,294 3,288 Non‐Instructional Services 549 490 526 414 191 503 473 391 396 Capital Outlay 82 88 85 86 79 99 ‐ ‐ ‐
TOTAL 11,744 11,342 12,043 11,734 12,055 12,185 11,626 11,521 11,414
Page 237 Schedule 18 ALBUQUERQUE PUBLIC SCHOOLS OPERATING DATA
STUDENT ENROLLMENT
Average 80/120 Day Enrollment-Pupil Count-910B-5
2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 Elementary School 44,332 45,370 45,101 44,778 44,531 44,172 43,488 42,849 43,523 41,315 Middle School 19,251 19,433 19,355 19,532 19,517 19,705 20,047 19,895 19,695 19,872 High School 23,502 23,570 23,580 23,401 23,344 24,133 23,793 23,954 24,226 24,015 APS Authorized Charter Schools 5,024 5,215 4,447 5,979 7,034 ‐6,536 ‐ ‐ ‐ Total 92,109 93,587 92,482 93,689 94,426 94,546 87,328 86,698 87,443 85,202
Source: Enrollment data is based on the 80/120 day average enrollments from the State Equalization Funding Formula
Page 238 Schedule 19 ALBUQUERQUE PUBLIC SCHOOLS OPERATING DATA
FINAL FUNDED STATE EQUALIZATION GUARANTEE PROGRAM COST
Program Number of Program Final Funded Fiscal Year Unit Value Program Units Cost 75% Credits SEG 2012‐2013$ 3,673.54 161,693.72$ 593,988,348 $ (3,853,666) $ 590,134,682 2011‐2012$ 3,598.87 163,126.23$ 587,070,110 $ (3,672,011) $ 583,398,099 2010‐2011$ 3,712.17 162,940.74$ 604,863,794 * $ (3,574,543) $ 601,289,251 2009‐2010$ 3,792.65 162,000.14$ 614,409,812 ** $ (3,814,796) $ 610,595,016 2008‐2009$ 3,871.79 161,401.11$ 624,911,192 $ (3,648,475) $ 621,262,717 2007‐2008$ 3,674.26 166,348.36$ 611,207,133 $ (3,547,010) $ 607,660,123 2006‐2007$ 3,446.44 167,689.88$ 577,933,120 $ (2,810,191) $ 575,122,929 2005‐2006$ 3,198.01 158,601.40$ 521,734,335 $ (2,820,238) $ 518,914,097 2004‐2005$ 3,068.70 160,800.81$ 493,449,455 $ (2,752,608) $ 490,696,847 2003‐2004$ 2,976.20 156,975.49$ 467,190,462 $ (3,602,366) $ 463,588,096 2002‐2003$ 2,889.89 152,783.55$ 441,527,648 $ (2,663,498) $ 438,864,150
(1 - Includes $23,284,057 in Federal ARRA Stabilization Funds (2 - Includes $54,203,625 in Federal ARRA Stabilization Funds
Source: APS Financial Statements
Page 239 Schedule 20 ALBUQUERQUE PUBLIC SCHOOLS OPERATING DATA
APS FACILITIES Year of Permanent Facility Construction S F Portable SF Total SF Elementary Schools DENNIS CHAVEZ ES 1978 68,580 14,784 83,364 ACOMA ES 1959 45,141 0 45,141 ADOBE ACRES ES 1964 54,254 25,792 80,046 ALAMEDA ES 1954 42,551 3,360 45,911 ALAMOSA ES 1959 37,580 26,880 64,460 ALVARADO ES 1952 43,945 5,376 49,321 APACHE ES 1967 53,678 5,152 58,830 ARMIJO ES 1960 59,827 4,480 64,307 ATRISCO ES 1960 58,652 2,576 61,228 JOHN BAKER ES 1970 66,847 2,688 69,535 EDMUND G. ROSS ES 1983 58,904 6,259 65,163 HUBERT HUMPHREY ES 1978 61,704 14,736 76,440 BANDELIER ES 1939 61,576 14,112 75,688 BARCELONA ES 1961 60,210 16,128 76,338 ONATE ES 1973-75 34,781 10,528 45,309 BEL-AIR ES 1952-54 70,599 4,920 75,519 BELLEHAVEN ES 1966 44,989 6,272 51,261 GOVERNOR BENT ES 1963 40,829 23,968 64,797 KIT CARSON ES 1970 52,531 19,680 72,211 CHAPARRAL ES( Including SPED Pre-K) 1984 55,050 37,632 92,682 CHELWOOD ES 1980 75,948 13,768 89,716 COCHITI ES 1961 44,380 6,272 50,652 COLLET PARK ES 1961 42,344 2,463 44,807 COMANCHE ES 1966 39,622 9,856 49,478 CORONADO ES 1936 43,036 0 43,036 DOLORES GONZALES ES 1975 35,566 17,360 52,926 DURANES ES (E) 1947 51,756 3,584 55,340 MARY ANN BINFORD ES 1984 46,427 27,776 74,203 EAST SAN JOSE ES 1958 60,988 7,186 68,174 EMERSON ES 1952 62,840 4,256 67,096 EUBANK ES 1956 45,890 14,336 60,226 MANZANO MESA ES 2004 65,516 16,128 81,644 EUGENE FIELD ES 1927 48,639 3,472 52,111 EDWARD GONZALES ES 2004 73,601 10,762 84,363 VENTANA RANCH ES 2004 69,761 29,568 99,329 SEVEN BAR ES 2002 63,208 24,080 87,288 GRIEGOS ES 1957 46,749 0 46,749 NORTH STAR ES 2006 79,693 0 79,693 HAWTHORNE ES 1954-56 59,951 8,200 68,151 HODGIN ES 1958 66,752 13,104 79,856 PAINTED SKY ES 1998 69,778 28,674 98,452 INEZ ES 1952 52,925 7,952 60,877 KIRTLAND ES 1961 46,586 6,452 53,038 SUSIE RAYOS MARMON ES 2009-10 94,806 7,952 102,758 LA LUZ ES 1955 49,065 2,607 51,672 LA MESA ES 1981 69,541 13,888 83,429
Page 240 Schedule 20 ALBUQUERQUE PUBLIC SCHOOLS OPERATING DATA
APS FACILITIES Year of Permanent Facility Construction S F Portable SF Total SF LAVALAND ES 1946 43,171 21,952 65,123 LONGFELLOW ES 1982 47,698 0 47,698 CHAMIZA ES 1995 57,307 13,440 70,747 LOS PADILLAS ES 1965 35,945 9,856 45,801 LOWELL ES 1954 41,461 12,880 54,341 MacARTHUR ES 1948 38,612 7,616 46,228 MATHESON PARK ES 1967 33,743 9,632 43,375 McCOLLUM ES 1961 58,847 7,840 66,687 MISSION AVENUE ES 1953 46,533 12,300 58,833 MITCHELL ES 1962 48,030 6,048 54,078 MONTE VISTA ES 1931 49,518 6,272 55,790 MONTEZUMA ES 1953 75,997 0 75,997 PETROGLYPH ES 1992 55,609 11,760 67,369 A. MONTOYA ES 1991 65,971 0 65,971 MOUNTAIN VIEW ES 1952 41,412 12,432 53,844 NAVAJO ES 1967 54,000 22,400 76,400 GEORGIA OKEEFFE ES 2010 85,000 0 85,000 ARROYO DEL OSO ES 1974 40,690 9,968 50,658 REGINALD CHAVEZ ES 1966 41,799 4,480 46,279 OSUNA ES 1968-70 44,289 4,480 48,769 PAJARITO ES 1993 61,662 9,408 71,070 LOS RANCHOS ES 1953 51,601 5,376 56,977 CARLOS REY ES 1959 70,006 25,160 95,166 SAN ANTONITO ES 1958 52,823 896 53,719 SANDIA BASE ES 1949-50 45,690 5,740 51,430 DOUBLE EAGLE ES 1996 62,371 3,280 65,651 CORRALES ES 1964 70,034 0 70,034 SIERRA VISTA ES 1966 53,541 19,712 73,253 SOMBRA DEL MONTE ES 1954-56 54,231 8,064 62,295 S.Y. JACKSON ES 1971 51,288 4,100 55,388 TOMASITA ES 1973 55,759 8,960 64,719 MARK TWAIN ES 1954 59,879 12,544 72,423 MARIE M. HUGHES ES 1981 45,974 23,136 69,110 VALLE VISTA ES 1952 52,480 19,712 72,192 LEW WALLACE ES 1934 34,089 0 34,089 WHERRY ES 1952 52,573 14,760 67,333 WHITTIER ES 1950 58,664 9,928 68,592 ZIA ES 1950 49,231 10,752 59,983 ZUNI ES 1960 46,373 10,752 57,125 TIERRA ANTIGUA ES 2009 85,304 0 85,304 RUDOLFO ANAYA ES 2009 85,304 5,376 90,680 SUNSET VIEW ES 2009 85,304 0 85,304 HELEN CORDERO PRIMARY SCHOOL 2009 83,877 0 83,877 Total Elementary Schools (89) 4,951,286 896,031 5,847,317
Page 241 Schedule 20 ALBUQUERQUE PUBLIC SCHOOLS OPERATING DATA
APS FACILITIES Year of Permanent Facility Construction S F Portable SF Total SF Middle Schools JOHN ADAMS MS 1956 111,654 16,400 128,054 CLEVELAND MS 1963 97,938 17,920 115,858 GARFIELD MS 1951 89,024 7,168 96,192 GRANT MS 1961 103,602 13,120 116,722 HARRISON MS 1960 113,808 20,608 134,416 HAYES MS 1963 97,142 14,336 111,478 HOOVER MS 1966 104,380 7,840 112,220 JACKSON MS 1958 79,078 9,856 88,934 JEFFERSON MS 1938 116,204 7,168 123,372 KENNEDY MS 1965 100,230 7,552 107,782 DESERT RIDGE MS 1997 148,079 8,960 157,039 MADISON MS 1959 111,332 9,856 121,188 McKINLEY MS 1956 78,311 17,024 95,335 JIMMY CARTER MS 2000 142,267 28,672 170,939 POLK MS 1968 84,949 4,920 89,869 ERNIE PYLE MS 1951 172,273 3,360 175,633 ROOSEVELT MS 1950 100,190 3,280 103,470 TAFT MS 1958 107,904 15,232 123,136 TAYLOR MS 1964 97,916 17,920 115,836 VAN BUREN MS 1960 107,828 5,376 113,204 WASHINGTON MS 1982 92,208 3,280 95,488 WILSON MS 1953 100,408 0 100,408 TRUMAN MS 1975 126,452 47,986 174,438 EISENHOWER MS 1975 108,345 28,672 137,017 LBJ MS 1992 158,691 7,168 165,859 JAMES MONROE MS 2001 147,100 3,584 150,684 TONY HILLERMAN MS 2009 172,000 0 172,000 Total Middle Schools (27) 3,069,313 327,258 3,396,571
High Schools DEL NORTE HS 1964-65 305,891 0 305,891 ELDORADO HS 1970-71 351,116 19,504 370,620 NEX+GEN ACADEMY HS 2010 46,894 0 46,894 HIGHLAND HS 1949 390,630 7,168 397,798 LA CUEVA HS 1986 387,921 0 387,921 MANZANO HS 1961 364,912 43,900 408,812 RIO GRANDE HS 1959 373,714 17,014 390,728 SANDIA HS 1958 326,965 9,856 336,821 VALLEY HS 1954-55 338,700 10,680 349,380 WEST MESA HS 1967 313,090 52,480 365,570 VOLCANO VISTA HS 2007-2009 484,630 0 484,630 ATRISCO HERITAGE ACADEMY HS 2008-2010 473,000 0 473,000 CIBOLA HS 1975 339,665 54,880 394,545 ALBUQUERQUE HS 1975 292,761 18,860 311,621 Total High Schools (14) 4,789,889 234,342 5,024,231
Total Traditional Schools 12,810,488 1,457,631 14,268,119
Page 242 Schedule 20 ALBUQUERQUE PUBLIC SCHOOLS OPERATING DATA
APS FACILITIES Year of Permanent Facility Construction S F Portable SF Total SF
Alternative Schools Sandia Mountain Natural History Center (Sandia Rec) 13,200 0 13,200 eCademy HS - APS Alternative Education Complex 2011 44,397 0 44,397 NEW FUTURES - APS Alternative Education Complex 1989 35,933 0 35,933 CAREER ENRICHMENT CENTER 1975 42,246 10,660 52,906 FREEDOM HS - APS Alternative Education Complex 1950 41,434 0 41,434 SCHOOL ON WHEELS (Hartline SW) 1955 17,546 1,792 19,338 SCHOOL ON WHEELS (Western Trail NW) 2008 0 8,736 8,736 VISION QUEST 0 3,380 3,380 1952-54 (NewBldg Desert Willow Family School - East Side 2009) 27,659 1,792 29,451 Alternative Schools 222,415 32,100 248,775
Total Schools 13,032,903 1,489,731 14,516,894
Administrative Facilities CITY CENTRE 1974 178,851 0 178,851 Aztec Complex 1957 35,025 10,752 45,777 Montgomery Complex 1955 35,832 25,110 60,942 FOOD SERVICES(Rankin) 1981 15,299 2,460 17,759 FOOD SERVICES (old Kmart on Louisiana) 1960-70? 100,000 100,000 KANW RADIO STATION 1950 1,580 0 1,580
LINCOLN COMPLEX Lincoln ‐ Main Building 1922 32,061 32,061 Special Projects 1950 8,652 8,652 Minor Shops Building 1955 3,364 3,364 Minor Shops Building 1969 16,191 16,191 Warehouse Yard Area 1965 10,280 10,280 Major Shops Building 1949 13,866 13,866 Warehouse Building 1949/55/61 32,078 32,078 Building Services ‐ Mechanica / Electrical 1940 3,648 3,648 Carpentry 14,826 14,826 Fleet Maintenance Repair Shop 2003 15,848 15,848 Environmental Management Sheds 764 764 Welding Building 1995 6,220 6,220 Central Kitchen / Materials Warehouse 1974 76,748 818 77,566 Facilities Design and Construction 1924 5,627 5,627 DLITS / Data Center 1987 34,600 34,600 Salvage 1974 6,688 6,688 Play Ground Repair & Construction 1940 5,289 5,289 Grounds Building 1970 6,314 6,314 Mason building 1992 2,157 2,157
Page 243 Schedule 20 ALBUQUERQUE PUBLIC SCHOOLS OPERATING DATA
APS FACILITIES Year of Permanent Facility Construction S F Portable SF Total SF Structural Shops Shed 1940 2,157 2,157 RDA 2009 4,603 4,603 Other Portable Buildings 1,792 1,792
Lowell West Admin Park ACCESS (Lowell West) 0 9,856 9,856 Clothing Bank(Lowell West) 0 4,480 4,480 ROTC (Lowell West) 0 1,792 1,792 Title 1(Lowell West) 0 8,960 8,960
NorthWest Diagnostic Center (Portable Complex) 2010 0 8,960 8,960
NorthEast Diagnostic Center (Portable Complex) 2010 0 9,856 9,856 SouthEast Diagnostic Center (Special Education Diagnostician Office Park)) 2010 0 13,440 13,440 MILNE STADIUM 1939 7,820 0 7,820 WILSON STADIUM 1961 7,214 0 7,214 NW Soccer Complex 2009 3,946 0 3,946
Total Admin 673,782 112,042 785,824
Total APS Facilities 13,706,685 1,601,773 15,302,718
Charter Schools Montessori of the Rio Grande Charter School 14,671 0 14,671 Native American Community Academy portables only 0 30,912 30,912 Old Armijo bldg AKA Nuestros Valores Charter 0 0 0 Public Academy for Performing Arts portables only 0 29,568 29,568 Robert F. Kennedy High School portables only 0 43,904 43,904 South Valley Academy 0 0 0 Juvenile Detention Center portables only 4,480 Total Charter Schools 14,671 104,384 119,055
Total APS Facilities (Including Charters Schools) 13,721,356 1,706,157 15,421,773
Page 244 Schedule 21 ALBUQUERQUE PUBLIC SCHOOLS DEMOGRAPHIC INFORMATION
POPULATION INFORMATION
US Census Albuquerque % State of % Year MSA Change New Mexico Change 1960 323,473 951,023 1970 379,132 17.2% 1,017,055 6.9% 1980 492,922 30.0% 1,303,143 28.1% 1990 599,416 21.6% 1,515,069 16.3% 2000 729,649 21.7% 1,821,078 20.2% 2010 867,318 18.9% 2,065,826 13.4% 2020 N/A 2,351,724 13.8% 2030 N/A 2,613,332 11.1% 2040 N/A 2,827,692 8.2%
% of Population Albuquerque New United Age MSA Mexico States 0 - 17 24.4% 25.0% 23.7% 18 - 24 9.6% 9.9% 10.0% 25 - 34 13.7% 13.0% 13.1% 35 - 44 12.6% 11.9% 12.9% 45 - 54 13.7% 13.3% 14.0% 55 & Older 26.0% 26.9% 26.3%
Source: Official Statement dated August 21, 2013
Page 245 Schedule 22 ALBUQUERQUE PUBLIC SCHOOLS DEMOGRAPHIC INFORMATION
Total Population Estimates
New Mexico Metropolitan Statistical Areas: 2000 to 2012
April 1, 2000r July 1, July 1, July 1, July 1, July 1, July 1, July 1, July 1, July 1, July 1, July 1, July 1, July 1, Population Census 2012p 2011r 2010r 2009r 2008r 2007r 2006r 2005r 2004r 2003r 2002r 2001r 2000r Estimates 2000 Area Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Base Population New Mexico 2,085,538 2,078,674 2,064,767 2,007,315 1,984,179 1,966,357 1,940,631 1,914,699 1,890,215 1,868,121 1,849,187 1,828,437 1,820,802 1,819,017 1,819,046 Metro Portion1 1,391,049 1,383,646 1,374,478 1,334,083 1,314,525 1,297,575 1,274,074 1,249,238 1,224,578 1,204,630 1,185,112 1,163,146 1,151,028 1,147,725 1,147,424 Albuquerque MSA2 901,700 897,320 889,568 855,604 844,699 833,232 816,808 797,788 780,142 765,629 753,492 739,700 731,957 729,729 729,649 Farmington MSA3 128,529 128,063 130,144 124,550 122,640 122,359 121,707 122,024 120,972 119,920 118,335 115,161 114,029 113,812 113,801 Las Cruces MSA4 214,445 212,944 210,325 206,395 201,706 198,551 194,117 189,590 185,256 182,444 178,735 176,675 175,199 174,880 174,682 Santa Fe MSA5 146,375 145,319 114,441 147,534 145,480 143,433 141,442 139,836 138,208 136,637 134,550 131,610 129,843 129,304 129,292 Nonmetro Portion1 694,489 695,028 690,289 673,232 669,654 668,782 666,557 665,461 665,637 663,491 664,075 665,291 669,774 671,292 671,622 p Preliminary. r Revised. 1 Metropolitan and nonmetropolitan portions are based on current metropolitan statistical area (MSA) definitions. 2 Bernalillo, Sandoval, Torrance and Valencia counties. 3 San Juan County. 4 Dona Ana County. 5 Santa Fe County. Note: The entire annual series of metro area estimates will be revised to be consistent with the April 1, 2010 Census counts. Source: U.S. Dept. Of Commerce, Bureau of the Census, Population Estimates Program, Population Division. Table prepared by: Bureau of Business and Economic Research, University of New Mexico.
Page 246 Schedule 23 ALBUQUERQUE PUBLIC SCHOOLS DEMOGRAPHIC INFORMATION
EMPLOYMENT
Albuquerque MSA State of New Mexico United States Labor Percent Labor Percent Percent Year Force Unemployed Force Unemployed Unemployed 2013* 399,188 6.60% 936,300 6.40% 7.60% 2012 396,421 6.90% 929,362 6.50% 8.10% 2011 398,129 7.00% 929,230 6.60% 8.50% 2010 410,134 8.40% 957,591 8.10% 9.40% 2009 407,396 7.00% 947,309 5.20% 7.60% 2008 411,990 4.80% 959,884 4.50% 4.90% 2007 409,370 3.70% 947,622 3.80% 4.60% 2006 407,076 4.70% 944,475 5.00% 4.70% 2005 406,138 4.00% 947,696 4.40% 5.50% 2004 394,696 4.40% 902,523 5.30% 6.00% 2003 389,299 5.00% 890,997 5.90% 6.00%
* As of May 2013 Source: Official Statement dated August 21, 2013
Page 247 Schedule 24 ALBUQUERQUE PUBLIC SCHOOLS DEMOGRAPHIC INFORMATION
Major Employers in the Albuquerque Metropolitan Area 2012 2011
Percentage of Percentage of Total Total Employer Business Employees Rank Employment Employees Rank Employment Kirtland AFB (Civilian) Defense 16,728 1 4.22% 16,200 1 4.07% University of New Mexico Education 15,360 2 3.87% 15,890 2 3.99% Albuquerque Public Schools Education 17,810 3 4.49% 14,000 3 3.52% Sandia National Labs Research Development 8,856 4 2.23% 7,940 4 1.99% Presbyterian Healthcare 7,310 5 1.84% 7,369 5 1.85% UNM Hospital Healthcare 5,960 6 1.50% 5,950 6 1.49% City of Albuquerque Government 5,500 7 1.39% 5,940 7 1.49% State of New Mexico Government 4,950 8 1.25% 5,910 8 1.48% Lovelace Healthcare 4,000 9 1.01% 3,700 9 0.93% Intel Corporation Semiconductor Manufacturer 3,500 10 0.88% 3,300 10 0.83%
Ten Largest Employers 89,974 22.60% 86,199 21.65%
Source: Albuquerque Economic Development
Page 248 Schedule 25 ALBUQUERQUE PUBLIC SCHOOLS DEMOGRAPHIC INFORMATION
HOUSEHOLD INCOME
Estimated Median Household Income
Albuquerque New United YEAR MSA Mexico States 2013 $48,494 $43,273 $49,297 2012 $45,942 $41,958 $49,581 2011 $46,022 $42,030 $49,726 2010 $47,775 $43,932 $52,795 2009 $46,392 $42,752 $51,433
Percent of Household by Effective Buying Income Groups - April 2013
Effective Buying Albuquerque New United Income Group MSA Mexico States Under $25,000 25.3% 29.7% 25.4% $25,000 - $34,999 11.0% 11.9% 10.9% $35,000 - $49,999 15.2% 15.1% 14.4% $50,000 - $74,999 18.5% 17.6% 18.1% $75,000 & Over 30.0% 25.6% 31.2%
Source: Official Statement dated August 31, 2013
Page 249 Schedule 26 ALBUQUERQUE PUBLIC SCHOOLS DEMOGRAPHIC INFORMATION
Total Personal Income1 ($000s), by Metropolitan and Nonmetropolitan Portions: 2002-2011
Area 2011p 2010r 2009r 2008r 2007 2006 2005 2004 2003 2002 Metropolitan Portion2 $48,191,233 $47,039,405 $45,601,156 $46,394,948 $43,892,552 $41,432,873 $38,387,997 $35,696,497 $33,339,563 $32,194,081 Albuquerque MSA3 31,459,030 30,687,620 29,899,277 30,310,730 28,819,987 27,377,152 25,338,334 23,662,762 22,237,929 21,494,461 Farmington MSA4 4,022,020 3,832,208 3,754,688 3,999,896 3,568,773 3,331,394 3,043,813 2,781,849 2,577,220 2,460,259 Las Cruces MSA5 6,400,012 6,249,942 5,865,691 5,698,173 5,297,009 4,857,042 4,544,076 4,177,217 3,865,773 3,702,346 Santa Fe MSA6 6,310,171 6,269,635 6,081,500 6,395,149 6,206,783 5,867,285 5,461,774 5,074,669 4,658,641 4,537,015 Nonmetro Portion2 22,881,953 21,842,953 20,369,051 20,942,942 19,143,125 17,841,494 16,953,829 15,882,194 14,799,841 14,146,434 New Mexico $71,073,186 $68,882,358 $65,970,207 $67,337,890 $63,035,677 $59,274,367 $55,341,826 $51,578,691 $48,139,404 $46,340,515 p Preliminary. r Revised. 1 Total personal income data are by place of residence. 2 Metropolitan and nonmetropolitan portions are based on current metropolitan statistical area (MSA) definitions. 3 Bernalillo, Sandoval, Torrance and Valencia counties. 4 San Juan County. 5 Dona Ana County. 6 Santa Fe County. Source: U.S. Department of Commerce, Bureau of Economic Analysis. Data released April 25, 2012 Table prepared by: Bureau of Business and Economic Research, University of New Mexico.
Page 250 Schedule 27 ALBUQUERQUE PUBLIC SCHOOLS DEMOGRAPHIC INFORMATION
New Mexico Gross Receipts Tax
Bernalillo County Sandoval County State of New Mexico Fiscal (000s) (000s) (000s) (000s) (000s) (000s) Year Retail Total Retail Total Retail Total 2013* 5,998,180 23,949,194 505,431 1,801,493 18,315,548 81,092,953 2012 7,883,404 31,367,092 685,312 2,414,153 23,914,774 104,221,141 2011 7,736,773 30,616,678 818,368 3,096,652 23,789,930 102,715,750 2010 7,724,391 29,663,675 731,028 2,723,090 18,488,631 70,166,804 2009 7,879,244 30,861,715 672,504 2,844,192 23,812,635 104,562,006 2008 8,747,460 32,671,406 785,917 3,117,745 25,711,762 110,710,200 2007 8,095,799 33,139,257 693,973 3,015,406 26,012,240 103,740,330 2006 7,682,692 31,886,942 1,113,413 3,290,815 24,014,746 94,347,408 2005 6,769,594 29,411,880 844,832 2,248,768 20,415,829 79,173,289 2004 6,440,237 27,288,148 621,763 1,778,075 18,414,335 70,477,792 2003 6,835,927 24,076,633 766,338 1,828,559 18,700,757 63,358,240
* Through March 2013 (Quarters 1, 2 and 3 of FY2013) Source: Official Statement dated August 21, 2013
Page 251 OTHER SUPPLEMENTARY INFORMATION CliflonlmsonAli en llP 500 Marquette NW. Suite 800 Albuquerque, NM 87 102 ~ 505·842·8290 I fax 505·842·156B CliftonLarsonAllen \ '{', WI. cI i fton larsona!Jen.com
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
State of New Mexico Albuquerque Municipal School District No. 12 To the Board of Education and Hector H. Balderas New Mexico State Auditor
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, the aggregate remaining fund information and the budgetary comparisons of the general fund and major special revenue funds of the Albuquerque Municipal School District No. 12, New Mexico (District), as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the District's basic financial statements, and the combining and individual funds and related budgetary comparisons of the District, presented as supplementary information and have issued our report thereon dated November 8, 2013.
Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the District's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we do not express an opinion on the effectiveness of the District's internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and questioned costs, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies described in the accompanying schedule of findings and questioned costs to be material weaknesses (2013-64, 2012-09,2013-46,2013-45,2013-15,2013-50,2013-72, and 2012-17).
Page 252 All indEfB'\iSo?nI memba of flew IO[E1f1a [iOflJI A significant deficiency is a deficiency, or a combination of deficiencies, i"n internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies described in the accompanying schedule of findings and questioned costs to be significant deficiencies (2012-06, 2012-05, 2012-03, 2013- 23, 2012-01,2013-65,2013-71,2013-06, FS 10-05, 2013-56, 2012-10, 2012-08, 2013-53, FS 11 -21 , FS 11-48, FS 11 -43, 2013-32, 2012-24, 2012-23, FS 07-141 , 2013-36, and 2013-18).
Compliance and Other Matters As part of obtaining reasonable assurance about whether the District's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion . The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and which are described in the accompanying schedule of findings and questioned costs as items 2013-20, 2013-21, 2013-22, 2013-03, 2013-24, 2013-10, 2013-02, 2013-07, 2013-08, 2013-09, 2013-28, 2013-29, 2013-68, 2013-01 , 2013-69, 2013-70, 2013-19, 2013-66, 2013-47,2013-48,2013-49, 2013-63, 2013-67,2013-14, FA 07-97, 2013-26, 2013-27, 201 3-25, 2012-19, 2013-61,2013-62, 2013-16, 2013-17, 2013-60, 2012-22, 2013-35, 2013-59, 2013-37 , 2013-38, 2013-39 , 2013-40, 2013-58, 2013-57, 2013-54, 2013-30, 2013-31, FS 09-197, 2013- 33,2013-34, FS 11-42, 2013-11, 2013-12, 2013-13, 2013-52, 2013-41 , 2013-42, 2013-43, 2013- 44, 2013-51, 2013-05, FS 09-176, 2013-04, and 2013-55.
The District's Response to Findings The District's responses to the findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The District's responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them.
Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
CliftonLarsonAlien LLP ~~LL? Albuquerque, NM November 8, 2013
Page 253 Cli ft on LarsonAllen llP 500 Marquette NW, Suite 800 Albuquerque, NM 87102 505-841-8190 I fax 505·841-1568 Cl ifton• LarsonAlien \'I\w/.cliftonlarsonallen.com INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
State of New Mexico Albuquerque Municipal School District No. 12 To the Board of Education and Hector H. Balderas New Mexico State Auditor
Report on Compliance for Each Major Federal Program We have audited the Albuquerque Municipal School District No. 12, New Mexico's (District) compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of the District's major federal programs for the year ended June 30, 2013. The District's major federal programs are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs.
Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs.
Auditors' Responsibility Our responsibility is to express an opinion on compliance for each of the District's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMS Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the District's compliance.
Opinion on Each Major Federal Program In our opinion, the District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its'major federal programs for the year ended June 30, 2013.
Page 254
I N T ERNAT I ONAL Other Matters The results of our auditing procedures disclosed an instance of noncompliance, which is required to be reported in accordance with OMS Circular A·133 and which is described in the accompanying schedule of findings and questioned costs as item 2012·01. Our opinion on each major federal program is not modified with respect to these matters.
The District's response to the noncompliance finding identified in our audit is described in the accompanying schedule of findings and questioned costs. The District's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.
Report on Internal Control Over Compliance Management of the District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the District's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMS Circular A·133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the District's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified certain deficiencies in internal control over compliance, as described in the accompanying schedule of findings and questioned costs as item 2012·01 that we consider to be a significant deficiency.
The District's response to the internal control over compliance findings identified in our audit are described in the accompanying scheduled of findings and questioned costs. The District's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.
Page 255 The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the result of that testing based on the requirements of OMS Circular A-133. Accordingly, this report is not suitable for any other purpose.
CliftonLarsonAlien LLP ~~LL? Albuquerque, New Mexico November 8, 2013
Page 256 State Of New Mexico Albuquerque Municipal School District No. 12 Schedule of Expenditures of Federal Awards For The Year Ended June 30, 2013
Amounts are reported in dollars. Passthrough CFDA Federal Federal Grantor or Pass-Through Grantor / Program Title Number Number Expenditures
U.S. Department of Health and Human Services Passthrough State ofNew Mexico Children Youth & Families Department Title XX Health & Social Services 25129 93.667 $ 567,452 Asthma Management 25168 93.938 59,443
Total U.S. Department of Health and Human Services $ 626,895
U.S. Department of Education Passthrough State ofNew Mexico Department ofEducation Title I 24101 * 84.010 24,957,947 Title I Charter School Total 24101 * 84.010 881,431 Total - Title I (Title I Cluster) 25,839,378
Title I School Improvement 24162 * 84.010A 1,092,569 Title I School Improvement Charter School Total 24162 * 84.010A 699,507 Total- Title I School Improvement (Title I Cluser) 1,792,076
Entitlement IDEA B 24106 * 84.027 26,658,157 Entitlement IDEA B Charter School Total 24106 * 84.027 1,091,995 IDEA B Early Intervention Services 24112 * 84.027 3,134,624 IDEA B Private School 24115 * 84.027 179,326 Reallocation IDEA-B 24120 * 84.027A 124,331 Reallocation IDEA-B Charter School Total 24120 * 84.027A 56,258 Total- Entitlement IDEA B (Special Education Cluster) 31,244,691
Preschool IDEA-B (Special Education Cluster) 24109 * 84.173 428,154 School Improvement Title I 1003g Grant 24124 * 84.377 2,073,010 School Improvement Title I 1003g Federal Stimulus 24224 * 84.388 1,839,946 Total - School Improvement Grant Cluster 3,912,956
English Language Acquisition 24153 84.365A 1,011,994 English Language Acquisition Charter School Total 24153 84.365A 39,174
Total ELL Title III Incentive Awards 1,051,168
Teacher / Principal Training / Recruiting 24154 * 84.367A 4,223,710 Teacher / Principal Training / Recruiting Charter School Total 24154 * 84.367A 263,287 Total - TeacherlPrincipal Training / Recruiting 4,486,997
Education of Homeless 24113 84196 70,812 21 st Century Community Living Centers 24119 84.287C 120,228
Carl Perkins Special Projects - Current 24171 84.048 45,205 Carl Perkins Secondary - Current 24174 84.048 868,587 Carl D. Perkins-Secondary Redistribution 24176 84.048 135,207 Carl D. Perkins-HSTW Current 24180 84.048 54,886 Carl D. Perkins-HSTW Current 24182 84.048 7,945 Total - Carl Perkins 1,111,830
Page 257 State Of New Mexico Albuquerque Municipal School District No. 12 Schedule of Expenditures of Federal Awards For The Year Ended June 30, 2013
Amounts are reported in dollars. Passthrough CFDA Federal Federal Grantor or Pass-Through Grantor / Program Title Number Number Expenditures
Impact Aid 11000 84.041 325,515 Title VII Impact Aid Special Education 25145 84.041 76,463 Title VII Impact Aid Indian Education 25147 84.041 12,648 Total - Title VII 414,626
School Leadership Program 25173 84.363A 633,625 After-School (PICAASO) 25174 84.287N 44,894 Indian Education Formula Grant 25184 84.060A 1,164,934 Indian Education Formula Grant Charter School Total 25184 84.060A 30,000 Elementary School Counseling 25215 84.215E 512,172 Smaller Learning Communities 25217 84.215L 1,326,809 Safe School/Healthy Students 25243 84.184L 1,979,075 Start Smart K-3 Utah State University Study 28191 84.396B 493,842
Total U.S. Department of Education 76,658,267
U.S. Department of the Interior Direct to Albuquerque Public Schools Johnson O'Malley 25131 15.130 $ 158,612 U.S. Dept. ofInterior Fish & Wildlife 25251 15.631 5,407 Total U.S. Department of the Interior 164,019
U.S. Department of Defense Direct to Albuquerque Public Schools Collaborative Research & Development 25112 12.114 $ 85,221 ROTC 25200 12.357 33,662 Total U.S. Department of Defense 118,883
U.S. Department of Agriculture Passthrough State ofNew Mexico Department ofEducation Child Nutrition Cluster School Breakfast Program 21000 * 10.553 6,727,137 National School Lunch Program 21000 * 10.555 20,160,012 National School Lunch Program Charter School Total I 21000 * 10.555 1,038,062 Total - Child Nutrition Cluster 27,925,211
1 These funds are passed through PED direct to the Charter Schools
U.S.D.A Commodities 21000 * 10.555 1,744,732
Child and Adult Food Program - Charter School Total 25171 10.558 33,611
Forest Reserve 11000 10.672 31,837 Total U.S. Department of Agriculture 29,735,391
Total Federal Financial Assistance $ 107,303,455
(*) Denotes Major Federal Financial Assistance Program
Page 258 State Of New Mexico Albuquerque Municipal School District No. 12 Schedule of Expenditures of Federal Awards For The Year Ended June 30, 2013
Notes to Schedule of Expenditures of Federal Awards 1. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal grant activity of the Albuquerque Public School District (District) and is presented on the modified accrual basis of accounting, which is the same basis as was used to prepare the fund financial statements. The information in this Schedule is presented in accordance with the requirements ofOMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the financial statements. 2. Subrecipients - N/A 3. Non-Cash Federal Assistance The District receives USDA Commodities for use in sponsoring the National School Lunch and Breakfast programs. The value of commodities received for the year ended June 30, 2013 was $1,744,732 and is reported in the Schedule of Expenditures of Federal Awards under the Department of Agriculture Commodities program, CFDA number 10.555. Commodities are recorded as miscellaneous revenues and expenditures in the food service fund. 4. Reconciliation of Schedule of Expenditures of Federal Awards to Financial Statements: Primary Government Total federal awards expended per Schedule of Expenditures of Federal Awards $107,303,455 Nutrition Cluster - USDA Food Service Revenue (27,925,211) Charter School Child and Adult Food Program Revenue (33,611) Total expenditures funded by other sources 864,135,861 Total expenditures, governmental funds $ 943,480,494
Page 259 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
Section I - Summary of Auditor's Results
Financial Statements
Type of auditor's report issued: Unmodified
Internal control over financial reporting:
• Material weakness(es) identified? IZl yes D no
• Significant deficiency(ies) identified that are not considered to be material weaknesses? IZl yes D none reported
Noncompliance material to financial statements noted? Dyes IZl no
Federal Awards
Internal control over major programs:
• Material weakness(es) identified? Dyes IZl no
• Significant deficiencies identified that are not considered to be material weakness(es)? IZl yes D none reported
Type of auditor's report issued on compliance for major program: Unmodified
Any audit findings, disclosed that are required to be reported in accordance with Section 51 O(a) of Circular A-133? IZl yes D no
Identification of major programs: CFDA Number(s) Name of Federal Program or Cluster 84.010 Title I Cluster 84.027 /84.027A /84.173 Special Education Cluster 84.377 / 84.388 School Improvement Grant Cluster 84.367A Improving Teacher Quality State Grants 10.553/ 10.555 Child Nutrition Cluster
Dollar threshold used to distinguish between type A and type B programs $3,000,000
Auditee qualified as low-risk auditee? Dyes IZl no
Page 260 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS
ALBUQUERQUE PUBLIC SCHOOLS
2012-01 - Payroll (Significant Deficiency)
Condition: During our single audit test work over payroll we noted the following: • Title I, Part A Cluster - 1 out of 40 payroll disbursements charged to the grant was identified as a summer payroll item that is uploaded into the payroll system through a spread sheet. It was determined that the rate that was being paid to the employee was higher than the approved pay rate. As a result of the incorrect pay rate, the grant was overcharged $360. • Title I, Part A Cluster - The District was unable to provide a time and effort certification for 1 out of 40 disbursements tested. • IDEA - S Cluster - The District was unable to provide a time and effort certification for 1 out of 40 disbursements tested. • Improving Teacher Quality - The District was unable to provide a time and effort certification for 3 out of 40 disbursements tested. • School Improvement Grant - The District was unable to provide a time and effort certification for 2 out of 40 disbursements tested.
Criteria: Per OMS A-133 and. federal agreements, the programs will be reimbursed for actual costs incurred. In addition, A-102 Common Rule requires that non-Federal entities receiving Federal Awards establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. In addition, per OMS Circular A-8?, for employees who work on multiple activities or cost objectives, a distribution of their salaries or wages will be supported by personal activity reports or equivalent documentation.
Effect: The program is not in compliance with grant requirements and the District may have incorrectly charged costs to the programs.
Cause: Management oversight and lack of effective internal controls surrounding the processing of payroll time sheets uploads to the payroll system, and ensuring complete collection of time and effort sheets.
Auditor's Recommendation: We recommend that APS establish effective internal controls surrounding the processing of time sheet payroll uploads. We recommend the processing of these payroll items be reviewed prior to uploading the information in to the payroll module to ensure the most accurate pay rate is entered. We recommend that the process be monitored by the grants management department. In addition, we recommend that the District continue to strive for full compliance in receiving all time and effort sheets. It has been brought to our attention by the grants department that they believe this can be achieved when the new grant module is implemented in the 2013-2014 school year.
Management's Response:
Over Payment: Grant Management has implemented internal control processes to prevent future overpayments related to supplemental pay. GM technicians will verify that hourly rates on uploaded spreadsheets correspond to the rates approved on the original timesheets andlor in Lawson.
Time and Effort: Grant Management has updated internal control processes to confirm receipt of all Time and Effort sheets. The GM administrative assistant will provide Associate Superintendents with a report of all employees with missing TIE reports. In instances where the missing TIE. report was mailed to the incorrect location, the GM staffing specialist will work with HR to confirm all records are updated and ensure subsequent TIE reports are routed to the correct location. Additionally, all employees paid from grant funds are required to complete a Time & Effort training annually.
Page 261 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ALBUQUERQUE PUBLIC SCHOOLS (CONTINUED)
2012-03 - Financial Close and Reporting (Significant Deficiency)
Condition: During test work over accounts receivable, we noted that subsequent cash receipts relating to FY13, totaling approximately $23,500, were not included in the current year revenue and related accounts receivable.
Criteria: Per NMAC 6.20.2.11, every school district shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP.
Effect: Possible misstatements to the financial statements.
Cause: The receipt of these funds were processed as a journal entry, and management's financial close and reporting process to identify receipts for an accurate accrual in the correct period did not include the review of this journal entry.
Auditor's Recommendation: We recommend management establish policies and procedures during the financial close and reporting process to include an evaluation of all transactions that could be subject to accrual or recognition in a different or current period.
Management's Response: During the FY 2013 closing, management established and implemented improved processes to help ensure the recognition of transactions subject to accrual. These processes will be further strengthened and greater care taken in future closings to help ensure the recognition of all transactions subject to accrual.
2012-05 -Internal Controls Surrounding Capital Asset Management (Significant Deficiency)
Condition: During our test work over capital assets, we noted the following: • It was noted that $1,500,000 dollars of assets were improperly capitalized in the current year. This error occurred due to a formula in the capital asset spread sheet that only took into consideration that the asset was over the $5,000 threshold, however, the assets were paid in bulk. Therefore, in bulk the assets exceeded the capitalization threshold, but not individually. • At the end of June 30, 2013, the District reported to the State Auditor's Office assets totaling $1,197,194 which the District deemed missing and removed from the asset listing. The District established a policy on June 30, 2010 to remove these assets from the listing if they were still missing after two years; these were removed in accordance with the policy. However, the district should strengthen controls over the safe guarding of assets. • It was noted that CIP activity of approximately $4,600,000 was closed out as of year end and transferred to a building improvement asset. Even though the activity was closed during the current year, after review of the supporting documentation it was determined that the activity should have been closed out as of June 30, 2010. It was noted that the depreciation for the three years that the asset should have been in place was taken in the current year. However, the review of open and closed projects which are then transferred to assets is only performed once a year, which allows more room for error.
Page 262 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30,2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ALBUQUERQUE PUBLIC SCHOOLS (CONTINUED)
2012-05 - Internal Controls Surrounding Capital Asset Management (Significant Deficiency) (continued)
Criteria: NMAC 6.20.2.22 requires that assets of a long-term character which are intended to continue to be held or used, such as land (including acquisition and improvements to grounds), buildings (including initial, acquisition, improvements, remodeling, additions, and replacement), furniture, machinery and equipment, shall be acquired and accounted for through the development and implementation of a complete property control system which shall be adopted by the local board and in accordance with GAAP. In addition, every school district shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP.
Effect: Possible misappropriation of assets and potential misstatements of financial statements. In addition, if confidential records or data are stored on any missing laptops, this information is at risk of unauthorized access.
Cause: Lack of proper review of the capital asset workbook and lack of timely review of missing assets. In addition, lack of proper review over open and closed projects in a timely manner.
Auditor's Recommendation: Currently, management has corrected the issue related to the formula in the capital asset workbook. In addition, the Capital Asset Department is in the process of addressing the missing assets in a timely manner. A procedural directive has been issued that reports assets that have been missing after two years to the Board of Education and deletes those assets from the District's Asset Management System. We recommend the District establish policies and procedures to evaluate all missing assets on an annual basis to identify the causes of the missing assets, in which the District will be able to implement additional procedures to safeguard all assets. We would also recommend that the review of open and closed activity for CIP projects be performed on a monthly basis to ensure timely reporting of assets and depreciation.
Management's Response:
Improperly Capitalized Assets: Capital Fiscal Services Asset Management personnel responsible for recording new assets have been notified about the importance of properly identifying assets as individual units during their review. Close attention will be used to properly identify that bulk purchases (Le. ten packs, etc.) are separated into individual units and cost is determined at the unit basis. Additionally the price associated with the asset description will be intuitively reviewed for reasonableness.
Missing Assets: Capital Fiscal Services Asset Management will continue following the Procedural Directive (established June 30, 2010) of reporting assets missing greater than two years to the Finance Committee, Board of Education and New Mexico State Auditor. These assets will remain on the district's asset management system until authorization from the state auditor or until one month has passed since notifying the state auditor without receipt of their response. Additionally, all sites will have an annual physical inventory conducted and reconciled. Upon completion of the reconciliation, the site will receive a listing of all assets missing during the physical inventory, with instructions to attempt to locate the assets and report back to Capital Fiscal Services Asset Management with their results. Capital Fiscal Services Asset Management will update the asset(s) record with the information received. On a quarterly basis, Capital Fiscal Services Asset Management will provide both the Executive Finance Director and Chief Financial Officer a listing (by site) of all assets categorized as missing.
Page 263 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ALBUQUERQUE PUBLIC SCHOOLS (CONTINUED)
2012-05 - Internal Controls Surrounding Capital Asset Management (Significant Deficiency) (continued)
CIP Activity Close Out: This $4.6 million project was funded through the Public School Capital Outlay Council (PSCOC), and could not be closed until the PSCOC provided final closing documents. APS will recommend to PSCOC that projects must be closed out on a more timely basis to avoid this delay. Also, PSCOC projects will be identified, listed and reviewed individually to help ensure timeliness of identifying closeouts and capturing the PSFA portion as an asset(s) during the year the project is completed.
APS will also work closely with other departments to require them to close out older, inactive project numbers so that capitalization will begin on time. We acknowledge that this review should be completed on a monthly basis, and will encourage these other departments to follow this schedule.
2012-06 - Risk Management (Significant Deficiency)
Condition: During internal control test work over the risk management function, it was noted out of 38 risk payments tested, one payment in the amount of approximately $2,000 that was processed and paid through accounts payable was never recorded in the APS QISS risk management software system.
Criteria: Proper control should be exercised over risk management claims.
Effect: The tracking of risk payments and claims in the risk management software is essential for the monitoring of claims paid and outstanding by management, estimating future risk payments and proper financial statement reporting. The data contained in the risk management system is sent to the District's independent actuary on an annual basis for the purpose of estimating claims incurred but not reported (IBNR), showing current claims reserves and estimated future cash flows needed to pay these claims. If the information is not complete because all information has not been entered into the claims system, then the chances for an inaccurate actuarial report and estimated liability that is recorded on the District's financial statements are both increased.
Cause: Lack of effective internal controls surrounding the processing of claims.
Auditor's Recommendation: The Risk Management Department should obtain a listing of all claim disbursements processed through the accounts payable department and reconcile this report with a similar report produced by the QISS system on a monthly basis.
Management's Response: The Risk Management Department agrees that a $2,000 payment was processed and paid though the accounts payable system and never recorded in the APS QISS risk management software system.
We have implemented the following internal control systems to ensure this problem does not occur again. Our new procedure is as follows:
All requests for claim payments must be accompanied by a special check request form and posted and\or recorded into QISSs at that time. The claim payment request form will be primarily completed by the claim adjusting staff. The check payment request form will be routed directly to the risk management department secretary. The secretary then performs a random check of the payment request against posted entries in the QISS system. The request is then forwarded to the Director of Risk Management for his review and approval. If approved by the director, the check request is taken to accounts payable. The accounts payable department produces checks for risk management.
Page 264 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ALBUQUERQUE PUBLIC SCHOOLS (CONTINUED)
2012-06 - Risk Management (Significant Deficiency) (continued)
They return the checks to risk management with a ledger sheet. The ledger sheet lists every payment and\or check. The risk management secretary reviews and reconciles each check to the check register from Accounts Payable. The Secretary delivers the physical check to the adjuster. The adjuster matches each payment to the correct claim file and QISS posting. The posting and\or recording status is then changed in the QISSs software system from posted to a paid status.
By following the above change procedure, the risk management department will avoid payments being made that are not recorded or posted into the QISS system.
2013-01 - Review of P-Card Reconciliations by Cardholders (Compliance and Other Matters)
Condition: During our test work over internal controls of purchasing cards, it was noted that 19 out of 22 p-card reconciliations tested were not signed by the cardholders as required per APS Purchasing Card Program Policies and Procedures.
Criteria: Per District purchasing card program policies and procedures, p-card reconciliations should be signed by the cardholders.
Effect: Unauthorized purchases made with a p-card could possibly go undetected; non-compliance with District policy.
Cause: Management oversight and lack of approval surrounding the reconciliation of p-card monthly statements and expenses.
Auditor's Recommendation: We recommend that the district follow the policy of reviewing and approving p-card reconciliations on a monthly basis in order to ensure authorized purchases are being made with the cards.
Management's Response: APS has already revised our internal departmental process to ensure all P card purchases are signed by the cardholder. In addition, the AP department has gone back and received cardholder signatures on all P-card purchases since the beginning of the current fiscal year.
2013-02 - Personnel Files (Compliance and Other Matters)
Condition: During our review of 22 personnel files, we noted 4 which lacked W-4 forms.
Criteria: Per NMAC 6.20.2.18, school districts shall maintain and have available for inspection the following employee record documentation: employment contracts (including increments), personnel/payroll action forms, certification records, employment eligibility verification (federal form 1-9 for citizenship certification), federal and state withholding allowance certificates, pay deduction authorizations, payor position change notices, Educational Retirement Act plan application, and direct deposit authorizations.
Effect: The District is not in compliance with NMAC 6.20.2.18.
Cause: Lack of effective procedures surrounding the maintenance of personnel files.
Page 265 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ALBUQUERQUE PUBLIC SCHOOLS (CONTINUED)
2013-02 - Personnel Files (Compliance and Other Matters) (continued)
Auditor's Recommendation: We recommend management establish procedures to ensure that the documents received by the district from employees are properly stored and filed to ensure compliance with NMAC 6.20.2.18
Management's Response: The payroll office is responsible for the W-4 forms for each employee, and is currently implementing a process whereby the W-4 forms are scanned into the personnel records imaging system. Tracking 14,000 to 15,000 forms is cumbersome, and this new imaging process should improve tracking and locating these very important documents.
2013-03 - Travel and Per Diem (Compliance and Other Matters)
Condition: During test work over travel and per diem the following issues were noted: • Out of 22 reimbursements tested, two were not reimbursed at the current reimbursable mileage rate. • All 22 travel reimbursements tested were out of district travel and did not receive approval by the Chief Financial Officer prior to travel. • Out of 22 reimbursements tested, two reimbursements were based upon actual mileage, but odometer readings were not provided. • Out of the 22 reimbursements tested, 5 reimbursements had disallowed costs (alcohol etc.). It was noted that the accounts payable staff did remove the disallowed items from the reimbursement and that none of the 5 employees were reimbursed for the disallowed costs. However, there was no uniform way for calculating the removal of the disallowed costs, including tip and tax. • We noted that the District does not have controls in place to track travel and per diem reimbursements that exceed the reimbursement limit of $1,500. Employees must provide to their department director/head a memo that details all expenses that have been reimbursed to them to date related to travel and per diem. The detail should indicate that the employee has reached the limit so that the department director/head can assess the need of any further travel.
Criteria: Per NMAC 6.20.2.19, each school district shall establish and implement written policies and procedures for travel and training. Travel policies and procedures shall be in compliance with the Per Diem and Mileage Act, Sections 10-8-1 through 10-8-8, NMSA 1978, and Department of Finance and Administration (DFA) regulations. In addition, per 10-8-5 (I) NMSA, any person who is not an employee, appointee or elected official of a county or municipality and who is reimbursed under the provisions of the Per Diem and Mileage Act in an amount that singly or in the aggregate exceeds one thousand five hundred dollars ($1,500) in anyone year shall not be entitled to further reimbursement under the provisions of that act until the person furnishes in writing to his department head or, in the case of a department head or board or commission member, to the governor or, in the case of a member of the legislature, to the New Mexico legislative council, an itemized statement on each separate instance of travel covered within the reimbursement, the place traveled to and the executive, judicial or legislative purpose served by the travel.
Effect: Non-compliance with applicable statutes and possible inaccurate reimbursements.
Cause: Management oversight and lack of effective internal controls surrounding the reimbursement of travel and per diem.
Page 266 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ALBUQUERQUE PUBLIC SCHOOLS (CONTINUED)
2013-03 - Travel and Per Diem (Compliance and Other Matters) (continued)
Auditor's Recommendation: We recommend management establish policies and procedures to ensure that reimbursements for travel or per diem are preformed uniformly. We recommend that management review the policies and procedures related to travel and per diem to ensure that they have been currently updated. In addition, management should also establish controls surrounding the approval and tracking of travel/per diem reimbursements that exceed $1,500, singly or in the aggregate in anyone year.
Management's Response: APS has reviewed the processes currently in place and has: • revised the travel form to ensure the current mileage rate will be utilized; • begun the process of revising the procedural directive requiring CFO approval prior to out of district travel but keeping the required supervisor approval; • received the appropriate formula for calculations when disallowed costs are removed from reimbursements and is already using this; • begun the process of revising the travel form to ensure Rand McNally mileage rates are used in any absence of odometer readings; and • added a line requiring employee affirmation they will not be exceeding the $1,500 per year reimbursement limit with the travel listed on the form.
2013-71 - Activity Funds (Significant Deficiency)
Condition: The administration and recordkeeping of the various student activity funds within the district is decentralized, in which the responsibility is assigned to the school principal and assigned bookkeeper for the school. The internal audit of the District performs thorough audits of each activity fund during the course of the fiscal year. The internal audit report as of October 29, 2012, which covered the results of the activity fund audits for the first part of FY13, included 43 audits. These 43 audits included 400 findings, which was an approximate 12% increase from the prior year audit on those specific activity funds. In addition, approximately 21 % received a lower overall compliance rating compared to the prior year, in which approximately 60% have compliance ratings less than a commendable rating. These results indicate that the internal control structure surrounding most activity funds is deficient and overall shows no improvement from prior year results.
Criteria: Per PSAB Supplement 18 - Student Activities & Athletics, the activity funds of the district are considered agency funds in which they are custodial in nature and the district is responsible for the accountability of agency funds. In addition, the Board of Education has fiduciary responsibility to establish and enforce policies and procedures to safeguard agency assets consistent with other assets of the school district. In addition, these funds are subject to the same internal controls as are all other district funds, in which any weaknesses in accounting practices and procedures should be addressed as soon as possible.
Effect: Possible misappropriations of activity funds in which the district has a fiduciary responsibility.
Cause: Due to the quantity of the activity funds in the district and the de-centralized processing of transactions.
Auditor's Recommendation: We recommend the district evaluate how the transactions of activity funds are processed and consider, with the assistance of internal audit, centralizing some or all of the transaction processing of the activity funds.
Page 267 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
2013-71 - Activity Funds (Significant Deficiency) (continued)
Management's Response: Management is concerned with the increase in the number and the nature of findings in the school activity funds. Management agrees with weakness in internal controls that the current decentralized model poses, as well as the potential for fraud, waste and abuse. Management has looked at centralizing the activity fund process in the past; however, outcry from the school sites, collective bargaining units and staff, as well as concern from the Board of Education, halted the initiative. Centralizing the management and transaction processing of the activity funds will require multiple phases and span several fiscal years. Management will work with the Internal Auditor to develop a proof of concept for the centralization of the activity funds.
21 ST CENTURY PUBLIC ACADEMY
FS 10-05 -Internal Control Structure (Significant Deficiency)
Condition: During our audit we noted the following:
1) For the majority of the fiscal year, the school inappropriately utilized journal entries to record the transactions of the school instead of utilizing the various modules of the accounting software. 2) An audit adjustment to increase the year-end payroll accrual in the amount of $18,200 was necessary.
Criteria: Every school district shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP.
Effect: Possible misappropriation of assets and potential misstatements of financial statements.
Cause: Lack of effective internal controls over the financial close and reporting process.
Auditor's Recommendation: We understand that since APS took over the business manager function the modules of the accounting system are now properly being utilized. We recommend that management continue to review and establish effective internal controls surrounding the financial close and reporting process to ensure financial statements are prepared in accordance with GAAP.
Management's Response: The APS Finance department assumed financial and budgetary responsibility for 21 st Century Public Academy on May 20, 2013. APS has begun to utilize all available functions of the APTA software system to assure effective controls and accurate financial reporting. APS is also recommending and implementing procedural changes as necessary to improve internal controls at the school, and to ensure compliance with generally accepted accounting principles. The Governing Council has become, and will continue to be, strongly encouraged to be actively engaged in discussion of these matters.
Page 268 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30,2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
21 sT CENTURY PUBLIC ACADEMY (CONTINUED)
2013-61 - Purchasing (Compliance and Other Matters)
Condition: During our review of 16 disbursements, we noted the following:
• 12 disbursements which lacked an approved purchase order or documentation of approval prior to the purchase. • The processing of payments was not always processed in a timely manner. • Disbursements totaling approximately $25,000 to a transportation company which lacked evidence of quotes being obtained.
Criteria: Per PSAB Supplement 13-Purchasing, the preparation and execution of a duly authorized purchase order must precede the placement of any order for goods, services or construction. In addition, policies and procedures to ensure compliance with the NM Procurement Code should be established and documented.
Effect: Possible unauthorized purchases or purchases without adequate budget authority. Non compliance with the NM Procurement Code.
Cause: Lack of adequate controls and effective procedures surrounding the purchasing process.
Auditor's Recommendation: The school has ceased operations as of June 30, 2013 and is no longer in operation.
Management's Response: Purchase orders are now processed through the APTA software system, and precede the order for goods and services. Compliance with the NM Procurement Code will be followed by the APS Finance Department's licensed Business Manager who has been working with the charter school. The principal will also be brought into the approval process.
2013-62 - Timely Deposit of Cash Receipts (Compliance and Other Matters)
Condition: During our review cash receipts, we noted the school doesn't consistently indicate in the cash receipt book the actual date of receipt; therefore, we were unable to determine whether the school deposited the receipts within 24 hours of receipt as required.
Criteria: NMAC 6.20.2.14 states that money received and receipted shall be deposited in the bank within twenty-four (24) hours or one banking day.
Effect: Non-compliance with NMAC 6.20.2.14.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management ensure all staff involved with cash receipts and deposits are familiar with the established procedures to ensure timely deposit of all receipts as required.
Management's Response: Arrangements have been implemented to deposit all cash receipts within 24 hours of receipt as required. The principal has also been advised of this requirement.
Page 269 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
21 sT CENTURY PUBLIC ACADEMY (CONTINUED)
2013-63 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit, it was noted that the school is not posting the required quarterly reports on the school's website.
Criteria: Per 22-8-13.2 NMSA 1978, the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests; (3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds; (4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
Effect: Non compliance with 22-8-13.2 NMSA 1978.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required reports are posted to the school'S website at least quarterly.
Management's Response: The APS Finance Department's licensed Business Manager will coordinate with school personnel responsible for maintaining the school's website to place a link to the Sunshine Portal prior to the 1st quarter's submission deadline of October 31,2013.
2013-64 - Budgetary Conditions/Cash Management (Material Weakness)
Condition: During the audit, we noted the School has expenditure functions where actual expenditures exceeded budgetary authority:
Fund 11000 - Instruction - $245,920 Fund 21000 - Food Services - $12,588 Fund 24153 - Instruction - $1,450 Fund 24154 -Instruction - $8,000 Fund 31200 - Capital Outlay - $170,184
In addition, the operating fund of the school at June 30, 2012 had a deficit fund balance of $188,427. This deficit was communicated to those charged with governance at the conclusion of the June 30, 2012 audit. However, as a result of continued poor cash management and budgeting and the school moving during FY13, the operating fund balance deficit increased to $309,334.
Criteria: Sound financial management and 6.20.2.9 (A) NMAC and 22-8-5 through 22-8-12.2 NMSA 1978 require that budgets not be exceeded at the legal level of control. For school districts, the function is the legal level of control.
Effect: Non-compliance with state statutes and, as a result of not monitoring the budget, the school is at risk of not having adequate resources for its obligations.
Cause: Lack of effective internal controls surrounding the budget review and monitoring process.
Page 270 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
21 sT CENTURY PUBLIC ACADEMY (CONTINUED)
2013-64 - Budgetary Conditions/Cash Management (Material Weakness) (continued)
Auditor's Recommendation: The school should establish effective internal controls to ensure the budget is reviewed and monitored on a more consistent basis, and process budgets adjustments or reduce expenditures as necessary.
Management's Response: The APS Finance Department's licensed Business Manager will monitor and review the budget monthly and prepare BARs as necessary. BARs will be presented to the APS Board of Education for approval and reviewed with the 21 sl Century Governance Council.
2013-65 - Accounting for Food Services (Significant Deficiency)
Condition: During the audit, it was noted that the school accounted for some of the food service costs and USDA claims in the activity fund instead of the food service special revenue fund.
Criteria: 6.20.2.23 NMAC states that food service funds are to be accounted for in the special revenue fund or the enterprise fund. All monies collected from the sale of food for the food service operation are to be accounted for in accordance with GAAP, U.S. Department of Agriculture (USDA) requirements, and Section 22-13-13, NMSA 1978.
Effect: Non-compliance with state statutes and misstatements to the activity and food service fund.
Cause: Lack of effective internal controls and understanding surrounding the proper accounting for these funds.
Auditor's Recommendation: The school should establish effective internal controls to ensure proper accounting of the food service funds.
Management's Response: The APS Finance Department's licensed Business Manager working with the charter school will be utilizing APTA software to properly record all food service revenue and costs to the food service special revenue fund as required.
2013-66 - Temporary Inter-Fund Loans (Compliance and Other Matters)
Condition: Often, expenditure-based reimbursement funds require temporary inter-fund loans from the operating fund pending receipt of the reimbursement request. However, the school required temporary inter-fund loans totaling approximately $133k as of June 30, 2013 from other special revenue funds due to inadequate cash available in the operating fund, which are restricted funds.
Criteria: PSAB Supplement 7-Cash Controls states that special revenue funds require a loan from the operational fund to cover the original expenditure. To insure adequate cash flow, reimbursements must be filed as often as permitted and ttie reimbursement tracked to ensure repayment. In addition, special revenue funds with cash balances are restricted and should not be used as temporary inter-fund loans; adequate cash balance should be available in the operating fund.
Effect: Non-compliance with applicable statutes and regulations.
Cause: Depleted available cash from the previous year operating fund balance deficit. Reimbursement requests not submitted frequently enough.
Page 271 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
21 sT CENTURY PUBLIC ACADEMY (CONTINUED)
2013-66 - Temporary Inter-Fund Loans (Compliance and Other Matters) (continued)
Auditor's Recommendation: . We recommend that management establish appropriate controls and procedures to ensure all reimbursement requests are submitted as frequently as necessary to prevent inter-fund loans with funds other than the operating fund.
Management's Response: The APS Finance Department has made budget reductions for the 2013- 2014 school year to absorb the deficient cash in the operating fund. RFRs will be completed as soon as possible to assist with cash flow.
ACADEMIA DE LENGUA Y CUL TURA
2012-08 - Cash Control Standards/PED Cash Reporting (Significant Deficiency)
Condition: During our field work, we noted the following issues related to the June 30, 2013 bank reconciliation: • The business manager was unable to provide a bank reconciliation and 4th quarter PED cash report until September 24, 2013. • An approximate $1,300 variance between the bank reconciliation and the trial balance. • The outstanding items included a check from December 1, 2010 for $586.52.
Criteria: Per NMAC 6.20.2.14, school districts shall establish and maintain a cash management program to safeguard cash and provide prompt and accurate reporting that adheres to cash management requirements of the Office of Management and Budget (OM B) Circular A-102 and applicable state and federal laws and regulations. Whenever any warrant or check is unpaid for one year, the fiscal officer shall cancel it in accordance with Section 6-10-57(A), NMSA 1978. Per State Audit Rule, the audit report of each school district shall include a cash reconciliation schedule which reconciles the cash balances as of the end of the previous year to the cash balance as of the end of the current fiscal year.
Effect: Possible misappropriation of assets and potential misstatements of financial statements. In addition, PED does not have accurate accounting of the school activity.
Cause: Lack of effective internal controls surrounding the monthly bank reconciliation process.
Auditor's Recommendation: The school has ceased operations as of June 30, 2013 and is no longer in operation.
Management's Response: The Professional Services Contract for financial management services was selected by the charter school. This contractor experienced staffing difficulties throughout the year that affected accurate and timely reconciliations and reporting. Academia de Lengua y Cultura's renewal application was denied and the charter school closed June 30, 2013.
2012-09 -Internal Control Structure (Material Weakness)
Condition: During the audit we encountered the following issues: • The original trial balance provided to the auditors to audit excluded the June bank reconciliation activity. The revised trial balance provided contained numerous misstatements which required audit adjustment. • Approximately $39,000 in unrecorded liabilities were identified and required accrual.
Page 272 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ACADEMIA DE LENGUA Y CULTURA (CONTINUED)
2012-09 - Internal Control Structure (Material Weakness) (continued)
• The trial balance included a payroll accrual which was overstated by approximately $40,000 which required an audit adjustment. • Approximately $16,000 in reimbursement requests were not processed until identification by the auditors, $1,707 of which the school is no longer eligible to claim a reimbursement for. • A bank reconciliation was not provided until September 24, 2013, which still contained errors.
Criteria: Every school district shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP. Per NMAC 6.20.2.23, for grant money that is sent directly, school districts shall utilize the funding for the purpose for which it was awarded. School districts shall submit complete and accurate reports required by the grant within the prescribed time.
Effect: Possible misappropriation of assets and potential misstatements of financial statements. Possible loss in funding for reimbursable expenses, non-compliance with statutes.
Cause: Lack of effective internal controls surrounding the financial reporting process.
Auditor's Recommendation: The school has ceased operations as of June 30, 2013 and is no longer in operation.
Management's Response: The Professional Services Contract for financial management services was selected by the charter school. This contractor experienced staffing difficulties throughout the year that affected accurate and timely reconciliations, reimbursements and reporting. Academia de Lengua y Cultura's renewal application was denied and the charter school closed June 30, 2013.
2012-10 -Internal Controls Surrounding Capital Asset Management (Significant Deficiency)
Condition: During our test work over capital assets, we noted that the school has capital assets totaling approximately $247,000 in original cost with a net book value of approximately $0 as of June 30, 2013; the school was unable to provide a detailed listing of these assets.
Criteria: NMAC 6.20.2.22 requires that assets of a long-term character which are intended to continue to be held or used, such as land (including acquisition and improvements to grounds), buildings (including initial, acquisition, improvements, remodeling, additions, and replacement), furniture, machinery and equipment, shall be acquired and accounted for through the development and implementation of a complete property control system which shall be adopted by the local board and in accordance with GAAP. In addition, every school district shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP.
Effect: Possible misappropriation of assets and potential misstatements of financial statements.
Page 273 STATE OF NEW MEXICO ALBU"QUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30,2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ACADEMIA DE LENGUA Y CUL TURA (CONTINUED)
2012-10 - Internal Controls Surrounding Capital Asset Management (Significant Deficiency) (continued)
Cause: Lack of effective internal controls surrounding capital asset management for capital assets.
Auditor's Recommendation: The school has ceased operations as of June 30, 2013 and is no longer in operation.
Management's Response: The Professional Services Contract for financial management services was selected by the charter school. This contractor experienced staffing difficulties throughout the year that affected accurate and timely reconciliations and reporting. Academia de Lengua y Cultura's renewal application was denied and the charter school closed June 30, 2013.
2013-56 - Purchasing (Significant Deficiency)
Condition: During our review of 16 disbursements, we noted the following: • 5 disbursements in which the purchase order was established after the purchase. • 1 disbursement which lacked a purchase order. • 1 disbursement which lacked a supporting invoice. • 1 disbursement which didn't agree to the invoice amount. • 1 disbursement with a purchase order for $4,000 in which the invoice exceeded $20,000. • 2 disbursements for which the school should have received 3 written quotes per the school policy; however, there was no evidence the quotes were obtained.
Criteria: Per PSAB Supplement 13-Purchasing, the preparation and execution of a duly authorized purchase order must precede the placement of any order for goods, services or construction. In addition, policies and procedures to ensure compliance with the NM Procurement Code should be established and documented.
Effect: Possible unauthorized purchases or purchases without adequate budget authority. Non compliance with the NM Procurement Code.
Cause: Lack of adequate controls and effective procedures surrounding the purchasing process.
Auditor's Recommendation: The school has ceased operations as of June 30, 2013 and is no longer in operation.
Management's Response: The Professional Services Contract for financial management services was selected by the charter school. This contractor experienced staffing difficulties throughout the year that affected accurate and timely reconciliations and reporting. Academia de Lengua y Cultura's renewal application was denied and the charter school closed June 30, 2013.
2013-57 - Personnel Files (Compliance and Other Matters)
Condition: During our audit, we noted 2 of 2 personnel files reviewed which lacked the ERB enrollment forms and 1-9 forms. .
Page 274 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30,2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ACADEMIA DE LENGUA Y CUL TURA (CONTINUED)
2013-57 - Personnel Files (Compliance and Other Matters) (continued)
Criteria: Per NMAC 6.20.2.18, the local board shall establish written payroll policies and procedures which comply with state and federal regulations on payroll as well as maintaining strict internal controls, close supervision and financial accounting in accordance with GAAP. School districts shall maintain and have available for inspection the following employee record documentation: employment contracts (including increments), personnel/payroll action forms, certification records, employment eligibility verification (federal form 1-9 for citizenship certification), federal and state withholding allowance certificates, pay deduction authorizations, payor position change notices, Educational Retirement Act plan application, and direct deposit authorizations.
Effect: Non compliance with the applicable statutes.
Cause: Lack of effective controls and procedures surrounding the personnel files.
Auditor's Recommendation: The school has ceased operations as of June 30, 2013 and is no longer in operation.
Management's Response: The Professional Services Contract for financial management services was selected by the charter school. This contractor experienced staffing difficulties throughout the year that affected accurate personnel files. Academia de Lengua y Cultura's renewal application was denied and the charter school closed June 30, 2013.
2013-58 - Timely Deposit of Cash Receipts (Compliance and Other Matters)
Condition: During our review of 8 cash receipts, we noted 2 deposits in the amount of $15 that were not deposited within 24 hours of receipt as required.
Criteria: NMAC 6.20.2.14 states that money received and receipted shall be deposited in the bank within twenty-four (24) hours or one banking day.
Effect: Non-compliance with NMAC 6.20.2.14.
Cause: Management oversight.
Auditor's Recommendation: The school has ceased operations as of June 30, 2013 and is no longer in operation.
Management's Response: The Professional Services Contract for financial management services was selected by the charter school. This contractor experienced staffing difficulties throughout the year that affected the oversight of cash receipts. Academia de Lengua y Cultura's renewal application was denied and the charter school closed June 30, 2013.
2013-59 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit, we noted the following issues regarding compliance with financial reporting: • It was noted that the school is not posting the required quarterly reports on the school's website. • The school didn't submit timely and accurate reports to PED by July 31 as required. • 3 of 12 ERB contributions were not submitted within 15 days of month end. • Management was unable to provide evidence of the December 2012941 filing.
Page 275 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ACADEMIA DE LENGUA Y CUL TURA (CONTINUED)
2013-59 - Financial Reporting (Compliance and Other Matters) (continued)
Criteria: Per 22-8-13.2 NMSA 1978, the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests; (3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds; (4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
In addition, PED cash reports should agree to the school's accounting records. ERB contributions should be submitted within 15 days of the end of the month.
Effect: Non compliance with 22-8-13.2 NMSA 1978 and inaccurate reporting to PED regarding the school's cash. Non-compliance with ERB regulations.
Cause: Lack of effective processes and controls surrounding the reporting process.
Auditor's Recommendation: The school has ceased operations as of June 30, 2013 and is no longer in operation.
Management's Response: The Professional Services Contract for financial management services was selected by the charter school. This contractor experienced staffing difficulties throughout the year that affected accurate and timely reconciliations and reporting. Academia de Lengua y Cultura's renewal application was denied and the charter school closed June 30,2013.
2013-60 -Governing Council Meeting Minutes (Compliance and Other Matters)
Condition: During our audit, management was unable to provide meeting minutes after August 28, 2012.
Criteria: 10-15-1 NMSA 1978 requires written minutes of all meetings.
Effect: Non compliance with 10-15-1 NMSA 1978.
Cause: Lack of adequate controls and procedures surrounding the record keeping of the meeting minutes.
Auditor's Recommendation: The school has ceased operations as of June 30, 2013 and is no longer in operation.
Management's Response: Academia de Lengua y Cultura's renewal application was denied and the charter school closed June 30, 2013.
Page 276 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
ALBUQUERQUE TALENT DEVELOPMENT SECONDARY CHARTER SCHOOL
2013-20 - Purchasing (Compliance and Other Matters)
Condition: We noted 1 of 25 disbursements tested in which the purchase amount exceeded the approved purchase order amount by $122.
Criteria: Per PSAB Supplement 13-Purchasing, the preparation and execution of a duly authorized purchase order must precede the placement of any order for goods, services or construction.
Effect: Possible unauthorized purchases or purchases without adequate budget authority.
Cause: Lack of adequate controls and effective procedures surrounding the purchasing process.
Auditor's Recommendation: We recommend that management establish appropriate controls and procedures to ensure all purchases have an approved purchase order/purchase requisition that is at least equal to the purchase amount prior to the purchase.
Management's Response: The school hired a new Business Manager in order to address inconsistencies in internal control and compliance such as the one noted. The school believes that these were isolated instances and they will not be repeated.
2013-21 - Travel and Per Diem (Compliance and Other Matters)
Condition: During our review of 2 travel and per diem reimbursements, it was noted that on both of the reimbursements the employee was reimbursed at 100% of the I RS rate.
Criteria: Per NMAC 6.20.2.19, each school district shall establish and implement written policies and procedures for travel and training. Travel policies and procedures shall be in compliance with the Per Diem and Mileage Act, Sections 10-8-1 through 10-8-8, NMSA 1978, and Department of Finance and Administration (DFA) regulations. Additionally, per the school policy, mileage reimbursements shall be at 80% of the IRS rate .
. Effect: Non-compliance with NMAC 6.20.2.19.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management ensure all staff involved with travel and per diem reimbursements are familiar with the established procedures to ensure compliance.
Management's Response: The school will ensure that all mileage is reimbursed at the authorized amount, which is at 80% of the IRS rate from the previous year.
2013-22 - ERB Contributions (Compliance and Other Matters)
Condition: During our audit it was noted that the school didn't submit the ERB contributions for 2 of 12 months in a timely manner.
Criteria: ERB requires the monthly ERB contributions to be submitted within 15 days of the end of the month.
Effect: Non compliance with ERB contribution and filing requirements.
Cause: Management oversight.
Page 277 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ALBUQUERQUE TALENT DEVELOPMENT SECONDARY CHARTER SCHOOL (CONT.)
2013-22 - ERB Contributions (Compliance and Other Matters) (continued)
Auditor's Recommendation: We recommend management establish procedures to ensure timely submission of the ERB contributions.
Management's Response: The late payments were due to turnover in the Business Manager position. The school has hired a new Business Manager to address the inconsistencies and compliance issues. A calendar is being kept to ensure timely, monthly contributions.
2013-23 - Reimbursement Requests (Significant Deficiency)
Condition: During our audit, we noted reimbursement requests within the expense reimbursement funds of the school totaling $7,887 which were not submitted timely, and the school is no longer eligible to make a reimbursement claim for these expenses.
Criteria: Per NMAC 6.20.2.23, for grant money that is sent directly, school districts shall utilize the funding for the purpose for which it was awarded. School districts shall submit complete and accurate reports required by the grant within the prescribed time.
Effect: Possible loss in funding for reimbursable expenses, non-compliance with statutes.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures surrounding the reimbursement process to ensure timely and accurate submission.
Management's Response: The school hired a new Business Manager in order to address inconsistencies in internal control and compliance such as the one noted. The school believes that these were isolated instances and they will not be repeated. The school will be reviewing this on a quarterly basis to ensure compliance.
2013-24 - Cash Control Standards/PED Cash Reporting (Compliance and Other Matters)
Condition: During our audit, we noted outstanding items in the June 30, 2013 bank reconciliation included 2 checks totaling $2,848 that were one year or older, that should have been cancelled. In addition, we noted numerous errors in the 4th quarter PED cash report in which amounts reported didn't agree to the trial balance.
Criteria: Per NMAC 6.20.2.14, school districts shall establish and maintain a cash management program to safeguard cash and provide prompt and accurate reporting that adheres to cash management requirements of the Office of Management and Budget (OMB) Circular A-102 and applicable state and federal laws and regulations. Whenever any warrant or check is unpaid for one year, the fiscal officer shall cancel it in accordance with Section 6-10-57(A), NMSA 1978. Per State Audit Rule, the audit report of each school district shall include a cash reconciliation schedule which reconciles the cash balances as of the end of the previous year to the cash balance as of the end of the current fiscal year.
Effect: Non-compliance with applicable statutes. In addition, PED does not have accurate accounting of the school activity.
Cause: Management oversight, lack of effective internal controls surrounding the cash reporting.
Page 278 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ALBUQUERQUE TALENT DEVELOPMENT SECONDARY CHARTER SCHOOL (CONT.)
2013-24 - Cash Control Standards/PED Cash Reporting (Compliance and Other Matters) (continued)
Auditor's Recommendation: We recommend that management ensure that adequate internal controls are established to ensure accurate reporting and compliance with applicable cash control standards.
Management's Response: Outstanding checks will be reviewed and removed as appropriate. Stale dated items will be removed prior to year end. The PED cash report will be reviewed with the General Ledger to ensure it is accurate before it is sent to PED.
ALICE KING COMMUNITY SCHOOL
2013-06 - Internal Control Structure (Significant Deficiency)
Condition: During our audit we noted the following issues: • During our review of the year-end bank reconciliation, it was noted that the outstanding checks contained numerous inaccuracies in which the bank reconciliation required revision. It was also noted that the reconciliation was reviewed and approved by the governing council without detection of the errors contained within the reconciliation. • During our journal entry review, we noted a journal entry in the amount of $1,017 for food costs that was inappropriately reclassified to the instruction function within the operating fund instead of the food services function.
Criteria: Per NMAC 6.20.2.14, school districts shall establish and maintain a cash management program to safeguard cash and provide prompt and accurate reporting that adheres to cash management requirements of the Office of Management and Budget (OMB) Circular A-102, and applicable state and federal laws and regulations. In addition, every school district shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP.
Effect: Non-compliance with state statutes, possible misstatements to the financial statements.
Cause: Lack of effective internal controls surrounding the bank reconciliation and journal entry processes.
Auditor's Recommendation: We recommend that management ensure that adequate internal controls are established to ensure accurate processing of journal entries and accurate bank reconciliations are performed monthly as required.
Management's Response: Alice King Community School (AKCS) recognizes the inaccuracies associated with the bank reconciliation. This was caused by a "cut and paste" error made by the business manager as they copied outstanding check information from the accounting system to the bank reconciliation template which still contained outstanding check information from the prior month. The current month's outstanding check values were copied over the prior month's information, but the current payee and check number information was not copied. Therefore the payee and check numbers (prior month's information) did not match current month outstanding check values. Because the values matched the amount of outstanding checks for the month, the balance per book and the balance per the bank were reconcilable. Had the Governing Council compared the outstanding check numbers on the
Page 279 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ALICE KING COMMUNITY SCHOOL (CONTINUED)
2013-06 - Internal Control Structure (Significant Deficiency) (continued) reconciliation to the bank statement, they would have realized that the many of the check numbers from the reconciliation had already cleared (and the amounts for the cleared checks did not match the amounts on the reconciliation). The Governing Council has carefully reviewed this issue and has clarified its expectations related to performing reviews of financial documents. Also, it has implemented an additional internal control into the bank reconciliation process. Prospectively, all bank reconciliations will be accompanied by a printout directly from the accounting system reflecting outstanding checks. Before approval, the Governing Council will ensure that check information on the bank reconciliation agrees with accounting system data. Furthermore, we will continue to perform our quarterly internal audit process of selected financial documents.
As for the journal entry error, the Governing Council and business manager will continue to perform monthly analysis to ensure adequate budget exists by fund and function and submit timely budget adjustment requests to properly fund the appropriate functions.
2013-07 - Timely Deposit of Cash Receipts (Compliance and Other Matters)
Condition: During our review of 6 cash receipts, we noted 2 deposits in the amount of approximately $2,388 were not deposited within 24 hours of receipt as required.
Criteria: NMAC 6.20.2.14 states that money received and receipted shall be deposited in the bank within twenty-four (24) hours or one banking day.
Effect: Non-compliance with NMAC 6.20.2.14.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management ensure all staff involved with cash receipts and deposits are familiar with the established procedures to ensure timely deposit of all receipts as required.
Management's Response: The AKCS business office will continue to make every effort to collect funds and deposit within 24 hours. A meeting was held with all staff to stress the importance of submitting all receipts to the business office within 24 hours.
2013-08 - Purchasing (Compliance and Other Matters)
Condition: We noted 1 of 7 disbursements tested in which the purchase amount exceeded the approved purchase order amount by $10.
Criteria: Per PSAB Supplement 13-Purchasing, the preparation and execution of a duly authorized purchase order must precede the placement of any order for goods, services or construction.
Effect: Possible unauthorized purchases or purchases without adequate budget authority.
Cause: Lack of adequate controls and effective procedures surrounding the purchasing process.
Auditor's Recommendation: We recommend that management establish appropriate controls and procedures to ensure all purchases have an approved purchase order/purchase requisition that is at least equal to the purchase amount prior to the purchase.
Page 280 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ALICE KING COMMUNITY SCHOOL (CONTINUED)
2013-08 - Purchasing (Compliance and Other Matters) (continued)
Management's Response: AKCS recognizes the error associated with this purchase order. This was caused by not including estimated shipping charges in the purchase order value. The business office will carefully prepare purchase orders to ensure adequate value to cover all expected costs, including shipping. The finance committee will add to their internal review procedures of reviewing POs or certain POs to verify they are not less than the invoiced amount.
2013-09 - Budgetary Conditions (Compliance and Other Matters)
Condition: The School has expenditure functions where actual expenditures exceeded budgetary authority:
Fund 24154 -Instruction - $775 Fund 11000 - Food Services - $1,017
Criteria: Sound financial management and 6.20.2.9 (A) NMAC and 22-8-5 through 22-8-12.2 NMSA 1978 require that budgets not be exceeded at the legal level of control. For school districts, the function is the legal level of control.
Effect: Non-compliance with state statutes.
Cause: Management oversight.
Auditor's Recommendation: The School should establish a policy of budgetary review at year-end and make the necessary budgetary adjustments.
Management's Response: The Governing Council and business manager will continue to perform monthly analysis to ensure adequate budget exists by fund and function and submit timely budget adjustment requests to properly fund the appropriate functions.
2013-10 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit, it was noted that the school is not posting the required quarterly reports on the school's website. In addition, the school didn't submit the March 2013 ERB in a timely manner; it was submitted 3 days late and, as a result, the school incurred a penalty.
Criteria: Per 22-8-13.2 NMSA 1978 the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests; (3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funos; (4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
In addition, ERB requires the monthly ERB contributions to be submitted within 15 days of the end of the month.
Effect: Non compliance with 22-8-13.2 NMSA 1978 and ERB contribution and filing requirements. Page 281 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ALICE KING COMMUNITY SCHOOL (CONTINUED)
2013-10 - Financial Reporting (Compliance and Other Matters) (continued)
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required reports are posted to the school's website at least quarterly. In addition, we recommend management establish procedures to ensure timely submission of the ERB contributions.
Management's Response: AKCS recognizes its failure to following the reporting requirements and will post a link to the quarterly financial statements on its web site, effective 10/7/13. Also, AKCS's business manger will ensure all ERB payments are made timely. AKCS will implement a process whereby the business manager will report to the governing council during monthly finance committee meetings regarding any penalties associated with faulty or delinquent business practices. This will ensure that any needed corrective action is promptly initiated.
CHRISTINE DUNCAN HERITAGE ACADEMY
2013-28 - Timely Deposit of Cash Receipts (Compliance and Other Matters)
Condition: During our review of 7 cash receipts, we noted 1 deposit in the amount of $102 which was not deposited within 24 hours of receipt as required.
Criteria: NMAC 6.20.2.14 states that money received and receipted shall be deposited in the bank within twenty-four (24) hours or one banking day.
Effect: Non-compliance with NMAC 6.20.2.14.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management ensure all staff involved with cash receipts and deposits are familiar with the established procedures to ensure timely deposit of all receipts as required.
Management's Response: The Business Manager has given a copy of the NMAC 6.20.2.14, Cash Control Standards, to the staff involved with cash receipts and deposits. The Administrative Assistant will take deposits to the bank on Monday, Wednesday, and Friday to ensure deposits are made within twenty four hours, or one banking day.
2013-29 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit, it was noted that the school is not posting the required quarterly reports on the school's website.
Criteria: Per 22-8-13.2 NMSA 1978 the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests; (3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds;
Page 282 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
CHRISTINE DUNCAN HERITAGE ACADEMY (CONTINUED)
2013-29 - Financial Reporting (Compliance and Other Matters) (continued)
(4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
Effect: Non compliance with 22-8-13.2 NMSA 1978.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required reports are posted to the school's website at least quarterly.
Management's Response: The school has taken action to post the financial reports quarterly on the school's website. The school's website includes links to the State of New Mexico's Sunshine Portal and the Albuquerque Public School's Accounting Department. The Business Manager will assume this responsibility.
CORRALES INTERNATIONAL CHARTER SCHOOL
FS 11-21 -Internal Control Structure (Significant Deficiency)
Condition: During our audit, we noted the following:
1) An approximate $10,000 journal entry to accrued payroll liabilities was required. 2) Approximately $8,000 in outstanding checks were reported as outstanding checks against cash based on the invoice date instead of the actual date the check was sent for payment. 3) An approximate $1,700 adjustment to fund balance in the operating fund was required and a revision to the previously submitted PED cash report was required.
Criteria: Every school district shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP.
Effect: Potential misstatements of financial statements and/or inaccurate reporting to PED.
Cause: Lack of effective internal controls over the year-end financial reporting process.
Auditor's Recommendation: We recommend that management evaluate the internal controls surrounding the year-end financial reporting process.
Management's Response: The identified journal entries had no significant impact on the financial status of the school and was based on traditional reporting methods used in past years. The audit committee and management have already discussed a corrective action plan and will implement a year-end procedure to identify accrual items and verify their accuracy in APTA to ready for audit.
Page 283 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
CORRALES INTERNATIONAL CHARTER SCHOOL (CONTINUED)
2013-68 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit, it was noted that the school is not posting the required quarterly reports on the school's website.
Criteria: Per 22-8-13.2 NMSA 1978, the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests; (3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds; (4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
Effect: Non compliance with 22-8-13.2 NMSA 1978.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required reports are posted to the school's website at least quarterly.
Management's Response: The Business Manager will post all financial reports from each finance meeting on its website and will also include a link to the Sunshine Portal so that the public has access to all financial data by November 1, 2013; posting of this information will continue from that date forward.
DIGITAL ARTS AND TECHNOLOGY ACADEMY
2013-69 - Purchasing (Compliance and Other Matters)
Condition: We noted 1 of 5 disbursements tested totaling $523 which lacked an approved purchase order prior to the purchase of goods or services.
Criteria: Per PSAB Supplement 13-Purchasing, the preparation and execution of a duly authorized purchase order must precede the placement of any order for goods, services or construction.
Effect: Possible unauthorized purchases or purchases without adequate budget authority.
Cause: Lack of adequate controls and effective procedures surrounding the purchasing process.
Auditor's Recommendation: We recommend that management establish appropriate controls and procedures to ensure all purchases have an approved purchase order/purchase requisition prior to the purchase.
Management's Response: The school has procedures in place over the purchase of goods and services. The assistant business manager will review the procedures and ensure that staff comply with them.
Page 284 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
DIGITAL ARTS AND TECHNOLOGY ACADEMY (CONTINUED)
2013-70 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit, it was noted that the school is not posting the required quarterly reports on the school's website.
Criteria: Per 22-8-13.2 NMSA 1978, the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests; (3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds; (4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
Effect: Non-compliance with 22-8-13.2 NMSA 1978.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required reports are posted to the school's website at least quarterly.
Management's Response: The NM PED has not issued any guidance as required in the statute 22-8- 13.2 NMSA 1978. The Business Manager will contact the NM PED to obtain the correct procedure to be implemented by the school.
GORDON BERN ELL CHARTER SCHOOL
2012-17 - Reimbursement Requests (Material Weakness)
Condition: During our audit, we noted reimbursement requests within the expense reimbursement funds of the school totaling $16,737 which were not submitted timely, and the school is no longer eligible to make a reimbursement claim for these expenses. In addition, the fund 31700 of the school has a deficit fund balance of $11,390 from previous year reimbursement requests not submitted as previously reported. This was left unresolved from the prior year.
Criteria: Per NMAC 6.20.2.23, for grant money that is sent directly, school districts shall utilize the funding for the purpose for which it was awarded. School districts shall submit complete and accurate reports required by the grant within the prescribed time.
Effect: Loss in funding for reimbursable expenses, non-compliance with statutes. In addition, the expenses had to be reclassified in the operating fund, which may lack adequate budget authority.
Cause: Lack of effective procedures and processes to ensure timely submission of all reimbursement requests.
Auditor's Recommendation: We recommend that management establish procedures surrounding the reimbursement process to ensure timely and accurate submission. In addition, we recommend management obtain approval to do a permanent cash transfer to cover the deficit fund balance in fund 31700. Page 285 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
GORDON BERNELL CHARTER SCHOOL (CONTINUED)
2012-17 - Reimbursement Requests (Material Weakness) (continued)
Management's Response: The school has hired a new business manager, effective October 21, 2013, who will ensure, under the supervision of her mentor, that all RfRs are submitted timely and accurately. The Finance Committee will review RfRs in its monthly meetings.
2013-47 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit, the following was noted regarding required financial and other reporting of the school: • The school is not posting the required quarterly reports on the school's website. • The activity for the operating fund in the 4th quarter PED cash report and OBMS actual upload didn't agree to the trial balance provided to the auditors.
Criteria: Per 22-8-13.2 NMSA 1978, the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests; (3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds; (4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
In addition, accurate data should be submitted to PED by July 31.
Effect: Non-compliance with 22-8-13.2 NMSA 1978.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required reports are posted to the school's website at least quarterly.
Management's Response: The school was unaware of the requirement to post quarterly reports on the school's website as this has never been a finding in years past. The school will either begin posting reports on its website or link to the State's Sunshine Portal.
2013-48 - Personnel Files (Compliance and Other Matters)
Condition: During our audit, we noted 1 of 2 personnel files reviewed which lacked the ERB enrollment form.
Criteria: Per NMAC 6.20.2.18, the local board shall establish written payroll policies and procedures which comply with state and federal regulations on payroll, as well as maintaining strict internal controls, close supervision and financial accounting in accordance with GAAP. School districts shall maintain and have available for inspection the following employee record documentation: employment contracts (including increments), personnel/payroll action forms, certification records, employment eligibility verification (federal form 1-9 for citizenship certification), federal and state withholding allowance certificates, pay deduction authorizations, payor position change notices, Educational Retirement Act plan application, and direct deposit authorizations.
Page 286 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
GORDON BERNELL CHARTER SCHOOL (CONTINUED)
2013-48 - Personnel Files (Compliance and Other Matters) (continued)
Effect: Non compliance with the applicable statutes.
Cause: Lack of effective controls and procedures surrounding the personnel files.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required documentation is contained in all personnel files.
Management's Response: The school believes that the ERB form in question was misplaced during a previous audit. All proper paperwork is on file with ERB, however, so the employee in question has not missed any payments. We will request that this employee submit a new ERB form so all files are complete.
2013-49 - Purchasing (Compliance and Other Matters)
Condition: We noted 3 of 20 disbursements tested totaling $1,569 which lacked an approved purchase order or purchase requisition prior to the purchase of goods or services.
Criteria: Per PSAB Supplement 13-Purchasing, the preparation and execution of a duly authorized purchase order must precede the placement of any order for goods, services or construction.
Effect: Possible unauthorized purchases or purchases without adequate budget authority.
Cause: Lack of adequate controls and effective procedures surrounding the purchasing and disbursement process.
Auditor's Recommendation: We recommend that management establish appropriate controls and procedures to ensure all purchases have an approved purchase order/purchase requisition prior to the purchase.
Management's Response: Staff members have been trained in proper purchasing procedures. T he full time, on-site business manager will closely monitor that these procedures are being followed with fidelity.
2013-50 - Internal Control Structure (Material Weakness)
Condition: During our audit we encountered the following issues:
• During our journal entry review, we noted there is not a formal review process for journal entries. There is no documentation that the Finance Committee reviews journal entries after they are prepared and posted by the business manager. • The original trial balance provided during the audit excluded an approximate $126,000 summer payroll accrual. • We noted expenditures totaling $16,737 within the various expense reimbursement funds of the school which were no longer eligible for reimbursement and required an audit adjustment to reclassify these expenditures to the operating fund. • The fixed asset schedule for FY13 included additions in the amount of approximately $188,000 which represented individual capital assets below the $5,000 capitalization threshold and shouldn't have been capitalized.
Page 287 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
GORDON BERN ELL CHARTER SCHOOL (CONTINUED)
2013-50 - Internal Control Structure (Material Weakness) (continued)
Criteria: Every school district shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP. In addition, 12-6-10 NMSA 1978 requires agencies to capitalize only chattels and equipment that cost over $5,000.
Effect: Misstatements of financial statements and/or possible misappropriation of assets.
Cause: Lack of effective internal controls surrounding the financial reporting process.
Auditor's Recommendation: We recommend that management establish a formal review process over journal entries to ensure that entries entered into the general ledger are proper and have proper back up documentation. We recommend that management establish a yearend financial review and reporting process. To ensure timely and proper reimbursement for expenditures relating to grant activities we recommend that management submit monthly reimbursement requests. In addition, we recommend that that adequate internal controls are established surrounding the capitalization of fixed assets.
Management's Response: Journal entries were reviewed previously at each Finance Committee meeting by a Finance Committee member. This practice has not been occurring, however, since our former business manager left GPS employment. Our new, full time, on-site business manager will ensure that journal entries are reviewed and signed off on at monthly FC meetings.
The $188,000 capital expenditure was mistakenly capitalized in the aggregate. The new business manager, under the supervision of her mentor, will ensure that items purchases under $5000 are not capitalized in the future.
The school anticipates that the other items will be rectified by the new business manager and will not re occur.
2013-67 - Security for Deposits of Public Money (Compliance and Other Matters)
Condition: During our audit, we noted the school had approximately $338,000 in deposits in excess of FDIC which were not secured as of June 30, 2013.
Criteria: Per 6-10-16 NMSA 1978, deposits of public money shall be secured by: (1) securities of the United States, its agencies or instrumentalities; (2) securities of the state of New Mexico, its agencies, instrumentalities, counties, municipalities or other subdivisions; (3) securities, including student loans, that are guaranteed by the United States or the state of New Mexico; (4) revenue bonds that are underwritten by a member of the financial industry regulatory authority, known as FINRA, and are rated "BAA" or above by a nationally recognized bond rating service; or (5) letters of credit issued by a federal home loan bank. Per 6-10-17 NMSA 1978, the securities delivered shall have an aggregate value equal to one-half the amount of public money to be received.
Effect: Non-compliance with statutes.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management ensure deposits of public money be secured as required. Page 288 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
GORDON BERNELL CHARTER SCHOOL (CONTINUED)
2013-67 - Security for Deposits of Public Money (Compliance and Other Matters) (continued)
Management's Response: The school was not informed that the FDIC unlimited insurance coverage expired on December 31, 2012 and was under the assumption it was in place during the entire fiscal year under audit. The school changed banks in July, 2013, and now has sufficient collateral to be in compliance with 6-10-16 NMSA, 1978.
LA ACADEMIA DE ESPERANZA
FA 07-97 - Budgetary Conditions (Compliance and Other Matters)
Condition: The school has expenditure functions where actual expenditures exceeded budgetary authority:
24101 - Support Services - $2,648
Criteria: Sound financial management and 6.20.2.9 (A) NMAC and 22-8-5 through 22-8-12.2 NMSA 1978 require that budgets not be exceeded at the legal level of control. For school districts, the function is the legal level of control.
Effect: Non-compliance with state statutes.
Cause: Lack of effective internal controls surrounding the budget review and monitoring process.
Auditor's Recommendation: The School should establish a policy of budgetary review at year-end and make the necessary budgetary adjustments.
Management's Response: The business manager will review budgetary conditions at year-end and will make the necessary adjustments. The principal and the budget committee will review the adjustments.
2013-14 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit, we noted the following issues regarding compliance with financial reporting: • It was noted that the school is not posting the required quarterly reports on the school's website. • Due to an error within the submitted 4th quarter PED cash report, cash for fund 31600 was under-stated by $168,535
Criteria: Per 22-8-13.2 NMSA 1978, the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests; (3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds; (4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
In addition, PED cash reports should agree to the school's accounting records.
Page 289 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
LA ACADEMIA DE ESPERANZA (CONTINUED)
2013-14 - Financial Reporting (Compliance and Other Matters) (continued)
Effect: Non compliance with 22-8-13.2 NMSA 1978 and inaccurate reporting to PED regarding the school's cash.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required reports are posted to the school's website at least quarterly. In addition, we recommend management establish procedures to ensure accurate reporting to PED.
Management's Response: Required reports have been posted to the school's website and will be updated quarterly by the counselor. The cash report will be corrected, by the business manager, to include formulas to ensure accurate reporting
LOS PUENTES CHARTER SCHOOL FOUNDATION
2013-25 -Internal Control Structure (Compliance and Other Matters)
Condition: During our audit, we noted the following issues: • The quarterly review of bank reconciliations by the finance committee lacks documentation or evidence of when and who performed the review. • Foundation disbursements lack documentation of the disbursement initiation and approval process.
Criteria: The foundation shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP.
Effect: Possible misappropriation of assets or misstatements without adequate approval and review of the foundations transactions.
Cause: Lack of adequate controls and processes surrounding review and disbursement processes.
Auditor's Recommendation: We recommend that management ensure adequate processes and controls are in place to ensure proper documentation and adequate review and approval of bank reconciliations and disbursements.
Management's Response: The Business Manager will work with the foundation to establish procedures to ensure that approvals are documented and that adequate reviews are completed for financial transactions.
2013-26 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit, it was noted that the school is not posting the required quarterly reports on the school's website.
Page 290 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
LOS PUENTES CHARTER SCHOOL (CONTINUED)
2013-26 - Financial Reporting (Compliance and Other Matters) (continued)
Criteria: Per 22-8-13.2 NMSA 1978, the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests; (3) cash reports,' including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds; (4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
Effect: Non compliance with 22-8-13.2 NMSA 1978.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required reports are posted to the school's website at least quarterly.
Management's Response: The Business Manager will submit the required reports on a quarterly basis to be posted on the school website.
2013-27 - Payroll Advances (Compliance and Other Matters)
Condition: During our audit, it was noted that, due to the structure of the school's licensed staff contract, the school is making payroll advances as the contract has a start date that precedes the actual starting date of the licensed staff.
Criteria: 13-1-158 NMSA 1978 expressly states that "no warrant, check or other negotiable instrument shall be issued in payment for any purchase of services ... unless the central purchasing office or the using agency certificates that the services ... have been received and meet specifications ... ". In addition, the anti-donation clause of the New Mexico Constitution, Article IX, Section 14, provides that "neither the state nor any county, school district or municipality, except as otherwise provided in the constitution, shall directly or indirectly lend or pledge its credit or make any donation to or in aid of any person, association or public or private corporation ... ".
Effect: Non-compliance with 13-1-158 NMSA 1978.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management work with their general counsel to determine the best approach to revise the licensed staff contract to avoid future payroll advances and non-compliance.
Management's Response: The school has worked to revise employee contracts to be paid out over 28 pay periods for 2013-2014, resulting in next school year's contract to begin being paid after employees begin work.
Page 291 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
FRIENDS OF THE MONTESSORI FOUNDATION
2013-19 -Internal Control Structure (Compliance and Other Matters)
Condition: During our audit we noted the following issues:
• The collections of the donations from the donation box involve one individual, furthermore, there are no controls in place to ensure the donation collections agree to the amount of the deposit. • The Foundation has not established controls over the review process of the paypal activity of the school. • The Foundation does not consistently document the approved donations to the school in the minutes of the foundation.
Criteria: The foundation shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP.
Effect: There exists the possibility of loss of donations due to lack of segregation of duties and lack of controls pertaining to the collection of donations and PayPal activity.
Cause: Management was not aware that the existing procedures and controls needed be further improved to better safe-guard against loss from unauthorized use or disposition, and that transactions need to be executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP.
Auditor's Recommendation: We recommend that management establish controls over the collection of donations and consistently document the approval of donations to the school the foundation's minutes. In addition, we recommend that management establish an effective review process of the foundation's paypal activity.
Management's Response: Management responds to each of the conditions identified as follows: • With respect to the deposit process the Foundation will implement the practice of involving a second person in the opening of the lockbox. • In regards to controls over PayPal, we would contend that while controls are in place, they will be improved to ensure that review of PayPal activity is adequate. • Lastly, donations to the school will be consistently approved by the Foundation and documented in the minutes
MOUNTAIN MAHOGANY COMMUNITY SCHOOL
2012-19 - Budgetary Conditions (Compliance and Other Matters)
Condition: The School has expenditure functions where actual expenditures exceeded budgetary authority:
Fund 29102 - Instruction - $8,374 Fund 26177 - Support Services - $4,301
Criteria: Sound financial management and 6.20.2.9 (A) NMAC and 22-8-5 through 22-8-12.2 NMSA 1978 require that budgets not be exceeded at the legal level of control. For school districts, the function is the legal level of control.
Page 292 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30,2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
MOUNTAIN MAHOGANY COMMUNITY SCHOOL (CONTINUED)
Effect: Non-compliance with state statutes.
Cause: Lack of effective internal controls surrounding the budget review and monitoring process.
Auditor's Recommendation: The School should establish a policy of budgetary review at year-end and make the necessary budgetary adjustments.
Management's Response: The finance committee will review the year-end budget and ensure that necessary budgetary adjustments are made.
2013-15 -Internal Control Structure (Material Weakness)
Condition: During our audit, we encountered the following issues:
• During our journal entry review, we noted 1 out of 5 journal entries which lacked evidence of review by someone independent of the preparer. • During our search for unrecorded liabilities, we noted $4,647 in liabilities that should have been accrued at June 30, 2013. • During our review of the school's payroll accrual at June 30, 2013, we noted numerous debit balances on various liability accounts, an indication that reconciliation at the account level was not adequately performed at year-end. In addition, the school did not identify the year-end payroll accrual for year round employees, which was determined to be approximately $3,000. • We noted that expenses related to the EMS I funding was incurred in fund 11000 and the cash receipts were recorded in fund 26177. A reclassification of the expenditures should have been performed at year-end; as a result, an audit adjustment was required. • The school received notification from the IRS on August 5, 2013 that stated that an amount of $15A34 was due immediately related to unpaid taxes from a prior period. The school failed to disclose this notification and potential liability to the auditors during the audit. It was discovered during our review of the 941 file.
Criteria: Every school district shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP.
Effect: Potential misstatements of financial statements and/or possible misappropriation of assets.
Cause: Lack of effective internal controls surrounding the financial reporting process.
Auditor's Recommendation: We recommend that management ensure that adequate internal controls are established surrounding the financial reporting process.
Management's Response: Internal controls are being put in place to insure segregated duties as regards finances. This will address the journal entries concern. We will reconcile all payroll liability accounts monthly and, in the future, will supply payroll accrual for year-round employees. We have no EMSI grant this year. The IRS notice we received we did not expect to have to pay. We actively addressed the situation and worked to resolve it with no penalties or payment due. In the future, our Business Official will assure that 941 totals agree with W2s being submitted.
Page 293 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
MOUNTAIN MAHOGANY COMMUNITY SCHOOL (CONTINUED)
2013-16 - Personnel Files (Compliance and Other Matters)
Condition: During our audit, we noted 2 of 2 personnel files reviewed which lacked ERB beneficiary designation forms.
Criteria: Per NMAC 6.20.2.18, the local board shall establish written payroll policies and procedures which comply with state and federal regulations on payroll as well as maintaining strict internal controls, close supervision and financial accounting in accordance with GAAP. School districts shall maintain and have available for inspection the following employee record documentation: employment contracts (including increments), personnel/payroll action forms, certification records, employment eligibility verification (federal form 1-9 for citizenship certification), federal and state withholding allowance certificates, pay deduction authorizations, payor position change notices, Educational Retirement Act plan application, and direct deposit authorizations. In addition, per 22-11-29 NMSA 1978, all members covered by the New Mexico Educational Retirement Board must complete ERB Form 42 to designate a beneficiary for their account.
Effect: Non-compliance with the applicable statutes.
Cause: Lack of effective controls and procedures surrounding the personnel files.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required documentation is contained in all personnel files.
Management's Response: The business official will ensure that current and future hires will complete ERB beneficiary designation forms, and file forms in a timely fashion.
2013-17 - Purchasing (Compliance and Other Matters)
Condition: We noted 2 of 14 disbursements tested totaling $1,396 which lacked an approved purchase order prior to the purchase of goods or services. In addition, we noted 1 of 14 disbursements tested in the amount of $436 which was a reimbursement to an employee and included reimbursement of gross receipts tax.
Criteria: Per PSAB Supplement 13-Purchasing, the preparation and execution of a duly authorized purchase order must precede the placement of any order for goods, services or construction. In addition, school policy does not allow for reimbursement of gross receipt tax to employees.
Effect: Possible unauthorized purchases or purchases without adequate budget authority.
Cause: Lack of adequate controls and effective procedures surrounding the purchasing and disbursement process.
Auditor's Recommendation: We recommend that management establish appropriate controls and procedures to ensure all purchases have an approved purchase order/purchase requisition prior to the purchase and that reimbursements to employees are in compliance with school policy.
Management's Response: The business official will develop procurement procedure which allows for purchase requisitions with signature to serve as a purchase order in emergency situations.
Page 294 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
MOUNTAIN MAHOGANY COMMUNITY SCHOOL (CONTINUED)
2013-18 - 941 Reporting (Significant Deficiency)
Condition: During our audit, we noted the 1st quarter of 2013 (Jan-Mar) was filed using the 2012 form. As a result, the calculations appeared incorrect due to the increase in the employer rate effective January 1,2013. In addition, this appeared to the IRS that the school had amended the 1st quarter 2012 filing, for which the IRS has now notified the school of a liability for unpaid taxes from the 1st quarter 2012941 filing in the amount of $15,434.
Criteria: The IRS requires accurate quarterly filing and reporting of the school's wages and related taxes on form 941.
Effect: Non compliance with IRS reporting requirements. Possible penalties and seizure of property by the IRS.
Cause: Lack of adequate controls and procedures surrounding the 941 filing and reporting process.
Auditor's Recommendation: We recommend that management establish adequate controls and procedures surrounding the 941 filing and reporting process. In addition, we recommend management continue to work with the IRS to properly resolve this issue.
Management's Response: The business official will ensure that the correct form will be used for filing in the future.
NATIVE AMERICAN COMMUNITY ACADEMY
FS 07-141 - Budgetary Conditions (Significant Deficiency)
Condition: The School has expenditure functions where actual expenditures exceeded budgetary authority: Fund 11000 - Support Services - $18,026 Fund 13000 - Support Services - $26,282 Fund 25146 - Instruction - $1,000 Fund 25147 - Support Services - $6,740 Fund 25184 - Support Services - $30,000 Fund 26176 - Support Services - $28,314 Fund 26185 -Instruction - $2,869 Fund 26207 -Instruction - $103 Fund 29131 - Support Services - $1,084 Fund 31600 - Capital Outlay - $23,775
Criteria: Sound financial management and 6.20.2.9 (A) NMAC and 22-8-5 through 22-8-12.2 NMSA 1978 require that budgets not be exceeded at the legal level of control. For school districts, the function is the legal level of control.
Effect: Non-compliance with state statutes and, as a result of not monitoring the budget, the school is at risk of not having adequate resources for its obligations.
Cause: Lack of effective internal controls surrounding the budget review and monitoring process.
Page 295 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
NATIVE AMERICAN COMMUNITY ACADEMY (CONTINUED)
FS 07-141 - Budgetary Conditions (Significant Deficiency) (continued)
Auditor's Recommendation: The school should establish effective internal controls to ensure the budget is reviewed and monitored on a more consistent basis, and process budgets adjustments or reduce expenditures as necessary.
Management's Response: The Business Office will start reviewing monthly financials to ensure there are no budgetary conditions and submit BARs as needed in a timely manner.
2012-22 - Agency Issued Credit Cards (Compliance and Other Matters)
Condition: During our field work, we noted the school was utilizing credit cards issued to the school instead of P-Cards. In addition, the school incurred credit card related fees and finance charges totaling approximately $230.
Criteria: State Audit Rule 2.2.2.10 G (17) states for agencies receiving general fund appropriations, Laws of 2011 Regular Session, Chapter 179, Section 3, Subsection M states, "Except for gasoline credit cards used solely for operation of official vehicles, telephone credit cards used solely for official business and procurement cards used as authorized by Section 6-5-9(1) NMSA 1978, none of the appropriations contained in the General Appropriation Act of 2011 may be expended for payment of agency-issued credit card invoices."
Effect: Non-compliance with 2.2.2.10 G (17).
Cause: Management oversight.
Auditor's Recommendation: We recommend that the school eliminate the use of credit cards and consider the use of P-Cards as deemed necessary.
Management's Response: As of July 2013, NACA is no longer using credit cards. We are currently doing purchases on a reimbursement basis or by check if possible.
2013-35 - Purchasing (Compliance and Other Matters)
Condition: During our review of disbursements we noted the following: • We noted 7 of 34 disbursements reviewed totaling $14,437 in which an approved purchase order was not established prior to the purchase. • We noted that the school lacks policies and procedures surrounding procurement. • We noted 2 of 10 credit card purchases which lacked an approved purchase requisition.
Criteria: Per PSAB Supplement 13-Purchasing, the preparation and execution of a duly authorized purchase order must precede the placement of any order for goods, services or construction. In addition, policies and procedures to ensure compliance with the NM Procurement Code should be established and documented.
Effect: Possible unauthorized purchases or purchases without adequate budget authority. Non compliance with the NM Procurement Code.
Cause: Lack of adequate controls and effective procedures surrounding the purchasing process.
Page 296 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
NATIVE AMERICAN COMMUNITY ACADEMY (CONTINUED)
2013-35 - Purchasing (Compliance and Other Matters) (continued)
Auditor's Recommendation: We recommend that management establish appropriate controls and procedures to ensure all purchases have an approved purchase order/purchase requisition that is at least equal to the purchase amount prior to the purchase. In addition, we recommend management become familiar with the NM Procurement Code and establish appropriate policies and procedures.
Management's Response: NACA will implement new checks and balances to ensure to have a purchase order in place before services are rendered. Also, a contracted accounting consultant will conduct random checks to ensure compliance.
2013-36 - Payroll (Significant Deficiency)
Condition: During our review of payroll and related personnel files we noted the following issues: • It was noted that, due to the structure of the school's licensed staff contract, the school is making payroll advances as the contract has a start date that precedes the actual starting date of the licensed staff. • 2 of 2 personnel files reviewed lacked ERB beneficiary designation forms. • 1 of 2 personnel files reviewed included a licensed staff contract that was not signed by the employee at all and was signed by the school personnel approximately 3 months after the start date. In addition, there was an error in the salary amount per the contract we compared to the actual paycheck. However, it was noted that the actual salary the employee was being paid was correct.
Criteria: Per NMAC 6.20.2.18, the local board shall establish written payroll policies and procedures which comply with state and federal regulations on payroll as well as maintaining strict internal controls, close supervision and financial accounting in accordance with GAAP. School districts shall maintain and have available for inspection the following employee record documentation: employment contracts (including increments), personnel/payroll action forms, certification records, employment eligibility verification (federal form 1-9 for citizenship certification), federal and state withholding allowance certificates, pay deduction authorizations, payor position change notices, Educational Retirement Act plan application, and direct deposit authorizations. In addition, per 22-11-29 NMSA 1978, all members covered by the New Mexico Educational Retirement Board must complete ERB Form 42 to designate a beneficiary for their account. In addition, 13-1-158 NMSA 1978 expressly states that "no warrant, check or other negotiable instrument shall be issued in payment for any purchase of services ... unless the central purchasing office or the using agency certificates that the services ... have been received and meet specifications ... ". In addition, the anti-donation clause of the New Mexico Constitution, Article IX, Section 14, provides that "neither the state nor any county, school district or municipality, except as otherwise provided in the constitution, shall directly or indirectly lend or pledge its credit or make any donation to or in aid of any person, association or public or private corporation ... ".
Effect: Non compliance with applicable statutes.
Cause: Lack of effective internal controls and processes surrounding the payroll and human resources functions of the school.
Auditor's Recommendation: We recommend management establish effective internal controls and process surrounding payroll and human resources functions. In addition, we recommend that management work with their general counsel to determine the best approach to revise the licensed staff contract to avoid future payroll advances and non-compliance.
Page 297 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
NATIVE AMERICAN COMMUNITY ACADEMY (CONTINUED)
2013-36 - Payroll (Significant Deficiency) (continued)
Management's Response: The Business Office is currently working on creating checklists for payroll file and also changing contracts for next year so that we ensure that payments are done after services have been rendered.
2013-37 - Travel and Per Diem (Compliance and Other Matters)
Condition: During our review of 1 travel and per diem reimbursement, it was noted that a reimbursement rate of .505 was used for reimbursement. However, the school utilizes the federal IRS reimbursable rate, which should have been .555.
Criteria: Per NMAC 6.20.2.19, each school district shall establish and implement written policies and procedures for travel and training. Travel policies and procedures shall be in compliance with the Per Diem and Mileage Act, Sections 10-8-1 through 10-8-8, NMSA 1978, and Department of Finance and Administration (DFA) regulations. Additionally, per the school policy, mileage reimbursements shall be at the IRS rate.
Effect: Non-compliance with NMAC 6.20.2.19.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management ensure all staff involved with travel and per diem reimbursements are familiar with the established procedures to ensure compliance.
Management's Response: NACA will begin to print out the reimbursement rates each time a mileage reimbursement is done to ensure the proper rate is being paid.
2013-38 - 941 Reporting (Compliance and Other Matters)
Condition: During our review of the school's 941 filings, we noted that the FICA wages reported by the school for the period ending December 31,2012 were reported at $424,201 instead of $474,201, and the FICA wages reported by the school for the period ending September 30, 2012 were reported at $382,925 instead of $383,925.
Criteria: The IRS requires accurate quarterly filing and reporting of the school's wages and related taxes on form 941.
Effect: Non compliance with IRS reporting requirements and possible penalties.
Cause: Lack of adequate controls and procedures surrounding the 941 filing and reporting process.
Auditor's Recommendation: We recommend that management establish adequate controls and procedures surrounding the 941 filing and reporting process.
Management's Response: NACA will ensure that a second review is done by a finance committee member before submitting the 941.
Page 298 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION II - FINANCIAL STATEMENT FINDINGS (CONTINUED)
NATIVE AMERICAN COMMUNITY ACADEMY (CONTINUED)
2013-39 - Temporary Inter-Fund Loans (Compliance and Other Matters)
Condition: Often, expenditure-based reimbursement funds require temporary inter-fund loans from the operating fund pending receipt of the reimbursement request. However, the school required temporary inter-fund loans totaling approximately $67k as of June 30, 2013 from other special revenue funds due to inadequate cash available in the operating fund, which are restricted funds.
Criteria: PSAB Supplement 7-Cash Controls states that special revenue funds require a loan from the operational fund to cover the original expenditure. To ensure adequate cash flow, reimbursements must be filed as often as permitted and the reimbursement tracked to ensure repayment. In addition, special revenue funds with cash balances are restricted and should not be used as temporary inter-fund loans; adequate cash balance should be available in the operating fund.
Effect: Non-compliance with applicable statutes and regulations.
Cause: Depleted available cash from the previous year operating fund balance deficit. Reimbursement requests not submitted frequently enough.
Auditor's Recommendation: We recommend that management establish appropriate controls and procedures to ensure all reimbursement requests are submitted as frequently as necessary to prevent inter-fund loans with funds other than the operating fund.
Management's Response: We will implement policies in budgeting that will ensure NACA budgets accurately in order to project a sufficient cash carryover. As of June 30, 2013, the operational fund is no longer in a deficit and the 2014 budget was created in order to allow for a cash carryover. The Business Office will also ensure reimbursements are done on a quarterly basis.
2013-40 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit we noted that the school is not posting the required quarterly reports on the school's website.
Criteria: Per 22-8-13.2 NMSA 1978 the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests; (3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds; (4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
Effect: Non compliance with 22-8-13.2 NMSA 1978.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required reports are posted to the school's website at least quarterly.
Management's Response: We will update our website to include a link to the NM Sunshine Portal so that financial information is available on 'a quarterly basis. Page 299 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
NUESTROS VALORES CHARTER SCHOOL
FS 11-42 - Budgetary Conditions (Compliance and Other Matters)
Condition: The school has expenditure functions where actual expenditures exceeded budgetary authority:
Fund 11000 - Food Services - $23,000
Criteria: Sound financial management and 6.20.2.9 (A) NMAC and 22-8-5 through 22-8-12.2 NMSA 1978 require that budgets not be exceeded at the legal level of control. For school districts, the function is the legal level of control.
Effect: Non-compliance with state statutes.
Cause: Management oversight.
Auditor's Recommendation: The school should establish a policy of budgetary review at year-end and make the necessary budgetary adjustments.
Management's Response: A daily actual count will be taken and given to Bocadillos in order to ensure that there are not extra lunch charges throughout the year (Receptionist). The business manager will reconcile the account on a monthly basis to make sure meal counts are matching billing and monthly claims.
2012-23 - Untimely Reimbursement Requests (Significant Deficiency)
Condition: During our audit, we noted reimbursement requests totaling $2,611 which were not submitted timely, and the school is no longer eligible to make a reimbursement claim for these expenses.
Criteria: Per NMAC 6.20.2.23, for grant money that is sent directly, school districts shall utilize the funding for the purpose for which it was awarded. School districts shall submit complete and accurate reports required by the grant within the prescribed time.
Effect: Possible loss in funding for reimbursable expenses, non-compliance with statutes.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures surrounding the reimbursement process to ensure timely and accurate submission.
Management's Response: The finance committee and business manager will review all year-end receivables by mid-June to ensure all outstanding balances are billed for. This amount will be reinstated in the 2013-2014 fiscal year so NVCS can bill for this amount.
2012-24 -Internal Control Structure (Significant Deficiency)
Condition: During our journal entry review, we noted 1 journal entry in the amount of $23,000 in which expenses were inappropriately re-classified to the instruction function within the operating fund instead of the food services function.
Page 300 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30,2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
NUESTROS VALORES CHARTER SCHOOL (CONTINUED)
2012-24 - Internal Control Structure (Significant Deficiency) (continued)
Criteria: Every school district shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP.
Effect: Potential misstatements of financial statements.
Cause: Lack of effective internal controls surrounding the journal entry process to ensure journal entries are appropriate and adequately supported.
Auditor's Recommendation: We recommend that management ensure that adequate internal controls are established surrounding the journal entry process.
Management's Response: A journal entry will not be needed if meal counts are correct for the 2013- 2014 fiscal year. If so, the difference will be allocated to the correct function within the operating account.
2013-30 - Purchasing (Compliance and Other Matters)
Condition: We noted 2 of 3 travel disbursements reviewed totaling $734 in which an approved purchase order was not established prior to the travel.
Criteria: Per PSAB Supplement 13-Purchasing, the preparation and execution of a duly authorized purchase order must precede the placement of any order for goods, services or construction.
Effect: Possible unauthorized purchases or purchases without adequate budget authority.
Cause: Lack of adequate controls and effective procedures surrounding the purchasing process.
Auditor's Recommendation: We recommend that management establish appropriate controls and procedures to ensure all purchases have an approved purchase order/purchase requisition that is at least equal to the purchase amount prior to the purchase.
Management's Response: All purchase orders will be issued prior to the travel date. This had been done correctly throughout the 2012-2013 fiscal year. The travel reviewed of $734 was a carryover balance from the 2011-2012 fiscal year.
2013-31 - Payroll Advances (Compliance and Other Matters)
Condition: During our audit, it was noted that, due to the structure of the school's licensed staff contract, the school is making payroll advances as the contract has a start date that precedes the actual starting date of the licensed staff.
Criteria: 13-1-158 NMSA 1978 expressly states that "no warrant, check or other negotiable instrument shall be issued in payment for any purchase of services ... unless the central purchasing office or the using agency certificates that the services ... have been received and meet specifications ... ". In addition, the anti-donation clause of the New Mexico Constitution, Article IX, Section 14, provides that "neither the state nor any county, school district or municipality, except as otherwise provided in the constitution, shall directly or indirectly lend or pledge its credit or make any donation to or in aid of any person, association or public or private corporation ... ". Page 301 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
NUESTROS VALORES CHARTER SCHOOL (CONTINUED)
2013-31 - Payroll Advances (Compliance and Other Matters) (continued)
Effect: Non compliance with 13-1-158 NMSA 1978.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management work with their general counsel to determine the best approach to revise the licensed staff contract to avoid future payroll advances and non-compliance.
Management's Response: A special GC meeting will be held with the staff to try to resolve this problem. Most likely, pay will be allocated over 2 additional pay periods so that employees do not miss a pay date.
2013-32 - Internal Controls Surrounding Capital Asset Management and Reporting (Significant Deficiency)
Condition: During our test work over capital assets, we noted an asset with an original cost of $80,000 and put into service in 2003 was never depreciated. As a result, a correction was made to the accumulated depreciation on the asset in the amount of $36,000.
Criteria: NMAC 6.20.2.22 requires that assets of a long-term character which are intended to continue to be held or used, such as land (including acquisition and improvements to grounds), buildings (including initial, acquisition, improvements, remodeling, additions, and replacement), furniture, machinery and equipment, shall be acquired and accounted for through the development and implementation of a complete property control system which shall be adopted by the local board and in accordance with GAAP. In addition, every school district shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP. In addition, Section 12-6-10(A) NMSA 1978 requires each agency to conduct an annual physical inventory of movable chattels and equipment on the inventory list at the end of each fiscal year.
Effect: Misstatements of financial statements.
Cause: Management oversight and the lack of effective internal controls surrounding the reporting of capital assets.
Auditor's Recommendation: We recommend that management establish effective internal controls surrounding the management and reporting of capital assets.
Management's Response: This is now being depreciated as the building has been in use. The difference was made up through the 2013 fiscal year.
2013-33 - 941 Reporting (Compliance and Other Matters)
Condition: During our audit, we noted the 2nd quarter 2013 filing incorrectly had the 1st quarter 2013 box checked, which may appear to the IRS that the school has duplicate filings and no filings for the correct period.
Criteria: The IRS requires accurate quarterly filing and reporting of the school's wages and related taxes on form 941. Page 302 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
NUESTROS VALORES CHARTER SCHOOL (CONTINUED)
2013-33 - 941 Reporting (Compliance and Other Matters) (continued)
Effect: Non compliance with IRS reporting requirements and possible penalties.
Cause: Lack of adequate controls and procedures surrounding the 941 filing and reporting process.
2013-33 - 941 Reporting (Compliance and Other Matters) (continued)
Auditor's Recommendation: We recommend that management establish adequate controls and procedures surrounding the 941 filing and reporting process.
Management's Response: The Business Manager will have the finance committee review such report prior to submitting to the IRS.
2013-34 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit, we noted that the school is not posting the required quarterly reports on the school's website.
Criteria: Per 22-8-13.2 NMSA 1978, the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests; (3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds; (4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
Effect: Non-compliance with 22-8-13.2 NMSA 1978.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required reports are posted to the school's website at least quarterly.
Management's Response: NVCS is now working with LDD consulting to set up a website. The quarterly financial will now be posted on the website. Also, a link will be set up to review the annual financial reports (BM and LDD consulting).
PUBLIC ACADEMY FOR PERFORMING ARTS
FS 11-43 -Internal Control Structure (Significant Deficiency)
Condition: During our journal entry review, we noted 1 journal entry in the amount of $17,236 in which expenses were inappropriately re-c1assified to the instruction function within the operating fund instead of the food services function.
Page 303 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30,2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
PUBLIC ACADEMY FOR PERFORMING ARTS (CONTINUED)
FS 11-43 -Internal Control Structure (Significant Deficiency) (continued)
Criteria: Every school district shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP.
Effect: Potential misstatements of financial statements.
Cause: Lack of effective internal controls surrounding the journal entry process to ensure journal entries are appropriate and adequately supported.
Auditor's Recommendation: We recommend that management ensure that adequate internal controls are established surrounding the journal entry process.
Management's Response: A daily actual count will be taken and given to Bocadillos in order to ensure that there are not extra lunch charges throughout the year (Receptionist). The business manager will reconcile account on a monthly basis to make sure meal counts are matching billing and monthly claims.
2013-11 - Timely Deposit of Cash Receipts (Compliance and Other Matters)
Condition: During our review of 6 cash receipts, we noted 1 deposit in the amount of approximately $63 that was not deposited within 24 hours of receipt as required.
Criteria: NMAC 6.20.2.14 states that money received and receipted shall be deposited in the bank within twenty-four (24) hours or one banking day.
Effect: Non-compliance with NMAC 6.20.2.14.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management ensure all staff involved with cash receipts and deposits are familiar with the established procedures to ensure timely deposit of all receipts as required.
Management's Response: The business office makes every effort to collect and deposit receipts within 24 hours.
2013-12 - Budgetary Conditions (Compliance and Other Matters)
Condition: The School has expenditure functions where actual expenditures exceeded budgetary authority:
Fund 24154 - Support Services - $700 Fund 11000 - Food Services - $17,236
Criteria: Sound financial management and 6.20.2.9 (A) NMAC and 22-8-5 through 22-8-12.2 NMSA 1978 require that budgets not be exceeded at the legal level of control. For school districts, the function is the legal level of control.
Effect: Non-compliance with state statutes. Page 304 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
PUBLIC ACADEMY FOR PERFORMING ARTS (CONTINUED)
2013-12 - Budgetary Conditions (Compliance and Other Matters) (continued)
Cause: Management oversight.
Auditor's Recommendation: The School should establish a policy of budgetary review at year-end and make the necessary budgetary adjustments.
Management's Response: 24154 were last minute expenditures where there was not enough time to create a BAR; however, the funds were received early enough this fiscal year so we can make appropriate adjustments throughout the year. As for fund 11000, a journal entry will not be needed if meal counts are correct for the 2013-2014 fiscal year. If so, the difference will be allocated to the correct function within the operating account
2013-13 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit we noted the following issues regarding compliance with financial reporting: • It was noted that the school is not posting the required quarterly reports on the school's website. • Due to a typo within the submitted 4th quarter PED cash report, cash was over-stated by $2,823,334.
Criteria: Per 22-8-13.2 NMSA 1978, the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests; (3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds; (4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
In addition, PED cash reports should agree to the school's accounting records.
Effect: Non compliance with 22-8-13.2 NMSA .1978 and inaccurate reporting to PED regarding the school's cash.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required reports are posted to the school's website at least quarterly. In addition, we recommend management establish procedures to ensure accurate reporting to PED.
Management's Response: All financials will be posted on the PAPA website, as well as a link to all annual financial reports (BM and Technology Administrator).
Page 305 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ROBERT F. KENNEDY CHARTER SCHOOL
FS 09-176 - Untimely Deposit of Cash Receipts (Compliance and Other Matters)
Condition: During our review, we noted that 2 out of 6 cash receipts totaling $180 were not deposited within 24 hours of receipt as required.
Criteria: Per NMAC 6.20.2.14 states that money received and receipted shall be deposited in the bank within twenty-four (24) hours or one banking day.
Effect: Non-compliance with NMAC 6.20.2.14.
Cause: Management oversight, lack of effective processes to ensure timely deposit of all receipts.
Auditor's Recommendation: We recommend that management implement processes to ensure timely deposits of all receipts as required.
Management's Response: The School has implemented policies and procedure to address this issue. The policy indicates that deposits will be made within 72 hours of receipt. This is in compliance with State Statute for non-significant cash receipts. In addition, the School will be requesting a waiver from PED to insure this is not an issue in future audits.
FS 11-48 - Cash Control Standards (Significant Deficiency)
Condition: During our review of the year-end bank reconciliation, the following issues were noted: • The June 30, 2013 bank reconciliation included the outstanding items, which consisted of 29 checks totaling $6,651 dated 11/30/11 and older. In addition, there was 1 outstanding deposit dated 3/28/11 for $29. • The school was unable to provide an accurate bank reconciliation for June 2013 until October 1, 2013. • The June 2013 bank statement showed the school had a negative cash balance from June 19 to June 24. During this period, the school had 12 checks returned by the bank due to NSF totaling $58,171, with NSF fees in the amount of $400.
Criteria: Per NMAC 6.20.2.14, school districts shall establish and maintain a cash management program to safeguard cash and provide prompt and accurate reporting that adheres to cash management requirements of the Office of Management and Budget (OMB) Circular A-102, and applicable state and federal laws and regulations. Whenever any warrant or check is unpaid for one year, the fiscal officer shall cancel it in accordance with Section 6-10-57(A), NMSA 1978. In addition, all bank accounts shall be reconciled on a monthly basis.
Effect: Non-compliance with state statutes.
Cause: Lack of effective internal controls surrounding the bank reconciliation and cash management process to ensure compliance with cash control standards. Potential misstatements of financial statements and/or possible misappropriation of assets.
Auditor's Recommendation: We recommend that management ensure that adequate internal controls are established to ensure accurate reporting and accurate bank reconciliations are performed monthly as required, and that all warrants unpaid for one year are properly cancelled in accordance with section 6- 10-57(A).
Page 306 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30,2013
SECTION" - FINANCIAL STATEMENT FINDINGS (CONTINUED)
ROBERT F. KENNEDY CHARTER SCHOOL (CONTINUED)
FS 11-48 - Cash Control Standards (Significant Deficiency) (continued)
Management's Response: The School experienced issues with the Aptafund accounting program during the fiscal year related to the general ledger and bank reconciliation process. The issues have been resolved and should not continue in 2013-14 fiscal year.
2013-41 Budgetary Conditions (Compliance and Other Matters)
Condition: The School has expenditure functions where actual expenditures exceeded budgetary authority:
Fund 11000 - Instruction - $32,611 Fund 11000 - Food Services - $4,856 Fund 11000 - Capital Outlay - $22,128
Criteria: Sound financial management and 6.20.2.9 (A) NMAC and 22-8-5 through 22-8-12.2 NMSA 1978 require that budgets not be exceeded at the legal level of control. For school districts, the function is the legal level of control.
Effect: Non-compliance with state statutes and, as a result of not monitoring the budget, the school is at risk of not having adequate resources for its obligations.
Cause: As a result of untimely requests for reimbursement submissions, the operating fund absorbed the expenses from these funds no longer eligible for reimbursement in which adequate budget authority was not available in the operating fund.
Auditor's Recommendation: The school should establish effective internal controls to ensure reimbursement requests are processed in a timely manner and budget adjustments should be posted as necessary.
Management's Response: The overages indicated resulted from audit adjustments which are affecting the Schools budget basis financial reporting. Technically, these items should be addressed in the subsequent year through budget adjustment requests and transfers to be approved by PED and the Governance Board. Due to these changes, the School will be required to resubmit reports and seek PED approval. The School will ensure this situation is not repeated.
2013-42 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit the following was noted regarding required financial and other reporting of the school: • The school is not posting the required quarterly reports on the school's website. • The school didn't submit the ERB contributions for 3 of 12 months in a timely manner. • The school didn't upload the 4th quarter budget and actual data in the OBMS in a timely manner. • The school didn't provide an accurate 4th quarter PED cash report in a timely manner.
Criteria: Per 22-8-13.2 NMSA 1978, the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests;
Page 307 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO.12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ROBERT F. KENNEDY CHARTER SCHOOL (CONTINUED)
2013-42 - Financial Reporting (Compliance and Other Matters) (continued)
(3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds; (4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
In addition, ERB requires the monthly ERB contributions to be submitted within 15 days of the end of the month. In addition, accurate data should be submitted to PED by July 31.
Effect: Non-compliance with 22-8-13.2 NMSA 1978 and ERB contribution and filing requirements.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required reports are posted to the school's website at least quarterly. In addition, we recommend management establish procedures to ensure timely submission of the ERB contributions.
Management's Response: The School will post quarterly reports to the web-site and submit ERB reports timely. The School experienced issues with the Aptafund accounting program during the fiscal year related to the general ledger. The issues have been resolved and should not continue in the 2013- 14 fiscal year and result in timely reporting.
2013-43 - Governing Council Conflicts of Interest (Compliance and Other Matters)
Condition: During our audit, it was noted that one of the governing council members resigned at the September 10, 2012 meeting as a result of a contract the school had with a company the member was associated with due to the violation of the conflicts of interest statute.
Criteria: Per 22-8B-5.2 NMSA 1978 (Governing body conflicts of interest), a person shall not serve as a member of a governing body of a charter school if the person or an immediate family member of the person is an owner, agent of, contractor with or otherwise has a financial interest in a for-profit or nonprofit entity with which the charter school contracts directly for professional services, goods or facilities. A violation of this subsection renders the contract between the person or the person's immediate family member and the charter school voidable at the option of the chartering authority, the department or the governing body. A person who knowingly violates this subsection may be individually liable to the charter school for any financial damage caused by the violation. No member of a governing body or employee, officer or agent of a charter school shall participate in selecting, awarding or administering a contract with the charter school if a conflict of interest exists. A conflict of interest exists when the member, employee, officer or agent or an immediate family member of the member, employee, officer or agent has a financial interest in the entity with which the charter school is contracting. A violation of this subsection renders the contract voidable.
Effect: Non compliance with 22-8B-5.2 NMSA 1978.
Cause: Lack of effective processes and procedures to ensure compliance with the statute.
Auditor's Recommendation: We recommend that management establish procedures to ensure that current governing council members and future governing council members are familiar with all laws and regulations pertaining to their responsibilities as a governing council member.
Page 308 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO.12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30,2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ROBERT F. KENNEDY CHARTER SCHOOL (CONTINUED)
2013-43 - Governing Council Conflicts of Interest (Compliance and Other Matters) (continued)
Management's Response: The School followed appropriate protocol. Once it was evident that the member of the governing council maintained a conflict of interest, that individual was asked to resign from the board.
2013-44 - Travel and Per Diem (Compliance and Other Matters)
Condition: During our review of 2 travel and per diem reimbursements, we noted both were advances to employees for travel in the amount of $354. However, the actual receipts amounted to $400, in which there was no evidence that the employees were reimbursed any additional amount if allowable.
Criteria: Per NMAC 6.20.2.19, each school district shall establish and implement written policies and procedures for travel and training. Travel policies and procedures shall be in compliance with the Per Diem and Mileage Act, Sections 10-8-1 through 10-8-8, NMSA 1978, and Department of Finance and Administration (DFA) regulations.
Effect: Non-compliance with NMAC 6.20.2.19, inaccurate reimbursements.
Cause: Lack of effective processes and procedures surrounding the travel and per diem reimbursement process.
Auditor's Recommendation: We recommend that management establish processes and procedures to ensure accurate reimbursements and compliance.
Management's Response: The School reviews travel and per diem documentation very carefully. These two instances did not result in over-expenditure. The School will continue to monitor travel expenses and ensure employees are properly reimbursed.
2013-45 - Reimbursement Requests (Material Weakness)
Condition: During our audit, we noted reimbursement requests within the expense reimbursement funds of the school totaling $71,688 which were not submitted timely, and the school is no longer eligible to make a reimbursement claim for these expenses.
Criteria: Per NMAC 6.20.2.23, for grant money that is sent directly, school districts shall utilize the funding for the purpose for which it was awarded. School districts shall submit complete and accurate reports required by the grant within the prescribed time.
Effect: Loss in funding for reimbursable expenses, non-compliance with statutes. In addition, the expenses had to be reclassified in the operating fund, which didn't have adequate budget authority.
Cause: Lack of effective procedures and processes to ensure timely submission of all reimbursement. requests.
Auditor's Recommendation: We recommend that management establish procedures surrounding the reimbursement process to ensure timely and accurate submission.
Management's Response: The School will implement procedures to ensure timely requests for reimbursement are processed. This was a result in turnover at the business manager position by the School's contracted service.
Page 309 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30,2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ROBERT F. KENNEDY CHARTER SCHOOL (CONTINUED)
2013-46 - Internal Control Structure (Material Weakness)
Condition: During our audit, we encountered the following issues:
• During our journal entry review, we noted 4 out 5 journal entries which lacked evidence of review by someone independent of the preparer. • The original trial balance provided during the audit included a $77,615 debit balance in the accounts payable account, which required revision. • The original bank reconciliation had a variance of $40,808 when compared to the trial balance. • During our search for unrecorded liabilities, we noted $9,208 in liabilities that should have been accrued at June 30,2013. • We noted a cash receipt in the amount of $18,181 incorrectly recorded to fund 24162 instead of fund 11000. • We noted a cash receipt in the amount of $18,479 incorrectly recorded to fund 31200 instead of fund 21000. • We noted a cash receipt in the amount of $12,663 incorrectly recorded to fund 24162 instead of fund 24154. • We noted the food services fund had excess expenses over revenues in the amount of $12,856, which required reclassification to the operating fund to prevent a deficit fund balance. • We noted expenditures totaling $71,688 within the various expense reimbursement funds of the school which were no longer eligible for reimbursement and required an audit adjustment to reclassify these expenditures to the operating fund.
Criteria: Every school district shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP.
Effect: Misstatements of financial statements and/or possible misappropriation of assets.
Cause: Lack of effective internal controls surrounding the financial reporting process.
Auditor's Recommendation: We recommend that management ensure that adequate internal controls are established surrounding the financial reporting process.
Management's Response: The School experienced issues with the Aptafund accounting program during the fiscal year related to the general ledger and bank reconciliation process. The issues have been resolved and should not continue in the 2013-14 fiscal year. The School will implement procedures to ensure these instances do not repeat, including approval of journal entries by the finance committee.
SIATECH
2013-55 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit, it was noted that the school is not posting the required quarterly reports on the school's website.
Page 310 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
SIATECH (CONTINUED)
Criteria: Per 22-8-13.2 NMSA 1978, the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests; (3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds; (4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
Effect: Non compliance with 22-8-13.2 NMSA 1978.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required reports are posted to the school's website at least quarterly.
Management's Response: Management has been under the impression that since the school's financial information is uploaded quarterly to the New Mexico Public Education Department and the Public Education Department posts all of the uploaded information onto the State of New Mexico Sunshine Portal, the school was in compliance with the posting requirement. Upon learning that the school was required to have a link to the Sunshine Portal on its website pursuant to 10-16D-6(C), one was established, although it was not in place during the year under audit.
As a result of this finding, the school has now created its own separate online finance reporting portal whereby all of the financial information enumerated in 22-8-13.2 and 1 0-16D-6 is available for review.
SOUTH VALLEY ACADEMY
2013-04 - Use of Procurement Cards (Compliance and Other Matters)
Condition: During our audit, we noted the following regarding the school's use of procurement cards:
1) The school establishes blanket purchase orders at the beginning of the fiscal year for most purchases made with the procurement cards during the year. The actual purchases made during the year are not reviewed and approved by the principal. 2) The current process allows one individual to make purchases with the procurement card and then subsequently process an electronic payment for the balance on the procurement card without a review or approval of the purchase or payment. 3) The school does not have documented policies and procedures surrounding the use of the procurement cards.
Criteria: Per 22-8-5.1 NMSA 1978, Procurement, travel and gas cards. (2011), the department shall promUlgate rules governing the use of procurement, travel and gas cards by school districts and charter schools. At a minimum, the rules shall require local school boards and governing bodies to adopt policies for the use of procurement, travel or gas cards, including placing limits on the amount and types of purchases that may be made on such cards and procedures to monitor, control and report expenditures.
Effect: Risk of fraud and/or misappropriation of the school's assets.
Page 311 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
SOUTH VALLEY ACADEMY (CONTINUED)
2013-04 - Use of Procurement Cards (Compliance and Other Matters) (continued)
Cause: Lack of effective internal controls and policies surrounding the use of procurement cards.
Auditor's Recommendation: We recommend that management evaluate the internal controls surrounding the procurement card process and establish written policies and procedures.
Management's Response: We will implement a procurement card policy and ensure that the principal reviews purchases.
2013-05 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit, it was noted that the school is not posting the required quarterly reports on the school's website.
Criteria: Per 22-8-13.2 NMSA 1978, the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests; (3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds; (4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
Effect: Non compliance with 22-8-13.2 NMSA 1978.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required reports are posted to the school'S website at least quarterly.
Management's Response: We have updated our website to include a link to the NM Sunshine Portal so that financial information is available on a quarterly basis.
THE BATAAN MILITARY ACADEMY
FS 09-197 -Internal Controls over Disbursements (Compliance and Other Matters)
Condition: During our audit we noted the following related to disbursements:
• We noted 2 of 11 disbursements totaling $975 in which the purchase was made prior to having an approved purchase order or requisition. • We noted 1 of 11 disbursements in which the vendor incorrectly sent an invoice for another entity, yet the school still paid the invoice. The vendor was over-paid approximately $400 during the fiscal year.
Page 312 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
THE BATAAN MILITARY ACADEMY (CONTINUED)
FS 09-197 - Internal Controls over Disbursements (Compliance and Other Matters) (continued)
Criteria: Every school district shall establish and maintain an internal control structure to provide management with reasonable assurance that assets are safe-guarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with GAAP. Per PSAB Supplement 13-Purchasing, the preparation and execution of a duly authorized purchase order must precede the placement of any order for goods, services or construction.
Effect: Possible unauthorized purchases/payments or purchases without adequate budget authority.
Cause: Lack of adequate controls and processes surrounding the purchase and disbursement process.
Auditor's Recommendation: We recommend that management ensure adequate processes and controls are in place to ensure compliance with purchasing and disbursement pOlicies and regulations.
Management's Response: The school hired a new Business Manager in order to address inconsistencies in internal control and compliance such as the one noted. The school believes that these were isolated instances and they will not be repeated.
2013-51 - Financial Reporting (Compliance and Other Matters)
Condition: During our audit it was noted that the school is not posting the required quarterly reports on the school's website. In addition, the school didn't submit the ERB contributions for 2 of 12 months in a timely manner.
Criteria: Per 22-8-13.2 NMSA 1978 the school shall post the following required reports on the school's website at least quarterly: (1) a report on the budget status of the charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses; (2) a statement of any budget adjustment requests; (3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds; (4) voucher reports, including a list of issued warrants or checks; (5) reports listing procurement, travel or gas card expenses; and (6) investment reports.
In addition, ERB requires the monthly ERB contributions to be submitted within 15 days of the end of the month.
Effect: Non-compliance with 22-8-13.2 NMSA 1978 and ERB contribution and filing requirements.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures to ensure the required reports are posted to the school's website at least quarterly. In addition, we recommend management establish procedures to ensure timely submission of the ERB contributions.
Management's Response: The late payments were due to turnover in the Business Manager position. The school has hired a new Business Manager to address the inconsistencies and compliance issues. A calendar is being kept to ensure timely, monthly contributions and submission of reports to be posted on the website. Page 313 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
THE BATAAN MILITARY ACADEMY (CONTINUED)
2013-52 - Governing Council Conflicts of Interest (Compliance and Other Matters)
Condition: During our audit, it was noted that the school signed a contract with an existing governing council member in the amount of $9,000; the governing council member ultimately resigned approximately one month after entering into the contract.
Criteria: Per 22-88-5.2 NMSA 1978 (Governing body conflicts of interest), a person shall not serve as a member of a governing body of a charter school if the person or an immediate family member of the person is an owner, agent of, contractor with or otherwise has a financial interest in a for-profit or nonprofit entity with which the charter school contracts directly for professional services, goods or facilities. A violation of this subsection renders the contract between the person or the person's immediate family member and the charter school voidable at the option of the chartering authority, the department or the governing body. A person who knowingly violates this subsection may be individually liable to the charter school for any financial damage caused by the violation. No member of a governing body or employee, officer or agent of a charter school shall participate in selecting, awarding or administering a contract with the charter school if a conflict of interest exists. A conflict of interest exists when the member, employee, officer or agent or an immediate family member of the member, employee, officer or agent has a financial interest in the entity with which the charter school is contracting. A violation of this subsection renders the contract voidable.
Effect: Non compliance with 22-88-5.2 NMSA 1978.
Cause: Lack of effective processes and procedures to ensure compliance with the statute.
Auditor's Recommendation: We recommend that management establish procedures to ensure that current governing council members and future governing council members are familiar with all laws and regulations pertaining to their responsibilities as a governing council member
Management's Response: The 80ard Member officially resigned before the contract was signed; however, the resignation was not reviewed until the following Governing Council meeting. The 80ard has reviewed the bylaws and will continue to do so on an annual basis.
2013-53 - Reimbursement Requests (Significant Deficiency)
Condition: During our audit, we noted reimbursement requests within the expense reimbursement funds of the school totaling $8,982 which were not submitted timely, and the school is no longer eligible to make a reimbursement claim for these expenses.
Criteria: Per NMAC 6.20.2.23, for grant money that is sent directly, school districts shall utilize the funding for the purpose for which it was awarded. School districts shall submit complete and accurate reports required by the grant within the prescribed time.
Effect: Possible loss in funding for reimbursable expenses, non-compliance with statutes.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management establish procedures surrounding the reimbursement process to ensure timely and accurate submission.
Page 314 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
THE BATAAN MILITARY ACADEMY (CONTINUED)
2013-53 - Reimbursement Requests (Significant Deficiency) (continued)
Management's Response: The school hired a new Business Manager in order to address inconsistencies in internal control and compliance such as the one noted. The school believes that these were isolated instances and they will not be repeated. The school will be reviewing this on a quarterly basis to ensure compliance.
2013-54 - Security for Deposits of Public Money (Compliance and Other Matters)
Condition: During our audit, we noted the school had approximately $96,000 in deposits in excess of FDIC which were not secured as of June 30,2013.
Criteria: Per 6-10-16 NMSA 1978, deposits of public money shall be secured by: (1) securities of the United States, its agencies or instrumentalities; (2) securities of the state of New Mexico, its agencies, instrumentalities, counties, municipalities or other subdivisions; (3) securities, including student loans, that are guaranteed by the United States or the state of New Mexico; (4) revenue bonds that are underwritten by a member of the financial industry regulatory authority, known as FINRA, and are rated "BAA" or above by a nationally recognized bond rating service; or (5) letters of credit issued by a federal home loan bank. Per 6-10-17 NMSA 1978, the securities delivered shall have an aggregate value equal to one-half the amount of public money to be received.
Effect: Non-compliance with statutes.
Cause: Management oversight.
Auditor's Recommendation: We recommend that management ensure deposits of public money be secured as required.
Management's Response: Appropriate members of the Governing Council and the Administration have completed the Pledged Collateral Form and the school is now in compliance.
APS FOUNDATION
2013-72 - Prior Period Restatement - Agency Transaction Determination (Material Weakness)
Condition: Certain donors impose restriction on use of monies to benefit programs of APS. In the current year, the Foundation determined that it had the authority to make spending decisions on the restricted funds to each program. As a result of the change in evaluation, management has restated its previously reported net position balance by $1.9 million to reflect the recording of the agency activity in the statement of revenues, expenses and change in net position of the prior years.
Criteria: All activity should be properly recorded in the Foundation's records.
Cause: The Foundation has not implemented a formal policy and procedure for identifying an agency fund vs. operational transaction when donor monies are received.
Effect: The FY 2012 net position balance was understated by $1.9 million and the error was corrected in FY 2013.
Recommendation: We recommend that all future activity be evaluated through a formal process to properly evaluate the correct recording of transactions. Page 315 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30,2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
APS FOUNDATION (CONTINUED)
2013-72 - Prior Period Restatement - Agency Transaction Determination (Material Weakness) (continued)
Management's Response: The Foundation's board members and accounting staff determined the presentation in the 2012 financial statement was incorrect. Based on this, we believe the prior period adjustment is based on management correctly evaluating the program activity. All future activity will be evaluated proactively to ensure the proper presentation of the program activity.
SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS
ALBUQUERQUE PUBLIC SCHOOLS
2012-01 - Payroll (Significant Deficiency, Instance of Non-compliance)
Federal Program: Title I, Part A Cluster (CFDA # 84.010) IDEA - B Cluster (CFDA # 84.027/84.027A ARRA, School Improvement Grant Cluster (84.377/84.388A-ARRA, and Improving Teacher Quality State Grants (CFDA # 84.367 A)
Federal Agency: Department of Education (Passthrough State of New Mexico Department of Education)
Questioned Costs: None
Condition: During our single audit test work over payroll we noted the following: • Title I, Part A Cluster - 1 out of 40 payroll disbursements charged to the grant was identified as a summer payroll item that is uploaded into the payroll system through a spread sheet. It was determined that the rate that was being paid to the employee was higher than the approved pay rate. As a result of the incorrect pay rate, the grant was overcharged $360. • Title I, Part A Cluster - The District was unable to provide a time and effort certification for 1 out of 40 disbursements tested. • IDEA - B Cluster - The District was unable to provide a time and effort certification for 1 out of 40 disbursements tested. • Improving Teacher Quality - The District was unable to provide a time and effort certification for 3 out of 40 disbursements tested. • School Improvement Grant - The District was unable to provide a time and effort certification for 2 out of 40 disbursements tested. .
Criteria: Per OMB A-133 and federal agreements, the programs will be reimbursed for actual costs incurred. In addition, A-102 Common Rule requires that non-Federal entities receiving Federal Awards establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. In addition, per OMB Circular A-87, for employees who work on multiple activities or cost objectives, a distribution of their salaries or wages will be supported by personal activity reports or equivalent documentation.
Effect: The program is not in compliance with grant requirements and the District may have incorrectly charged costs to the programs.
Cause: Management oversight and lack of effective internal controls surrounding the processing of payroll time sheets uploads to the payroll system, and ensuring complete collection of time and effort sheets.
Page 316 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2013
SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS (CONTINUED)
ALBUQUERQUE PUBLIC SCHOOLS (CONTINUED)
2012-01 - Payroll (Significant Deficiency) (continued)
Auditor's Recommendation: We recommend that APS establish effective internal controls surrounding the processing of time sheet payroll uploads. We recommend the processing of these payroll items be reviewed prior to uploading the information in to the payroll module to ensure the most accurate pay rate is entered. We recommend that the process be monitored by the grants management department. In addition, we recommend that the District continue to strive for full compliance in receiving all time and effort sheets. It has been brought to our attention by the grants department that they believe this can be achieved when the new grant module is implemented in the 2013-2014 school year.
Management's Response:
Over Payment: Grant Management has implemented internal control processes to prevent future overpayments related to supplemental pay. GM technicians will verify that hourly rates on uploaded spreadsheets correspond to the rates approved on the original timesheets andlor in Lawson.
Time and Effort: Grant Management has updated internal control processes to confirm receipt of all Time and Effort sheets. The GM administrative assistant will provide Associate Superintendents with a report of all employees with missing TIE reports. In instances where the missing TIE report was mailed to the incorrect location, the GM staffing specialist will work with HR to confirm all records are updated and ensure subsequent TIE reports are routed to the correct location. Additionally, all employees paid from grant funds are required to complete a Time & Effort training annually.
Page 317 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS
ALBUQUERQUE PUBLIC SCHOOLS
2012-01 - Payroll (Significant Deficiency) - Repeated
Condition: During our payroll test work we noted the following:
1) Title I, Part A Cluster - 1 out of 40 payroll disbursements charged to the grant was identified as a journal entry to make a retroactive payroll correction. However, it was determined the payroll correction was corrected by both grants management and the payroll department. As a result of the duplication of this correction, the grant was over-charged $10,419. 2) IDEA - B Cluster - 1 out of 40 payroll disbursements charged to the grant was identified as a journal entry to make a retroactive payroll correction for an employee. However, during this retroactive correction the District also charged the grant for mentoring activities the employee was receiving compensation for, which should have been paid out of operations. The total amount incorrectly charged to the grant totaled $462. 3) School Improvement Grant - The District was unable to provide a time and effort certification for 1 out 40 disbursements tested.
2012-02 - Internal Control Surrounding Warehouse/Supply Inventory (Significant Deficiency) - Resolved
Condition: During our year-end physical inventory observations, we noted the following: During our inventory observation of the Maintenance and Operations (M&O) inventory, we noted that inventory leaving the warehouse is not checked by M&O personnel after it is placed on the technicians' trucks to ensure that what was ordered is what was physically removed from the warehouse. In addition, during our test counts we identified 1 out of 20 inventory items with a count discrepancy of 2.
During our inventory observation of the Instructional Materials department, it was noted the department does not have written policies concerning inventory counting procedures. In addition, during our test counts we identified 2 out of 20 inventory items with count discrepancies with variances of 1 and 8.
During our inventory observation at the Food & Nutrition Services at the Rankin Warehouse, counts were not rechecked by personnel other than those who made the original counts. Also, test counts were not conducted to check the accuracy of the initial counts prior to the audit test counts and inventory tags were not utilized to ensure no duplicate counts were made. In addition, during our test counts we identified 5 out of 20 inventory items with count discrepancies with variances ranging from 1 up to 50.
2012-03 - Financial Close and Reporting (Material Weakness) - Repeated-Updated
Condition: During our test work, we noted the following misstatements as of June 30, 2011 that required prior period adjustments:
1) It was determined that the May and June 2011 USDA claims for the National School Lunch Program (CFDA 10.555) totaling $2,535,198 were received and recognized as revenue in August 2012. However, they should have been accrued as an accounts receivable and recognized as revenue as of June 30, 2011. 2) It was determined that Fund 31300 included an accounts receivable in the amount of $442,766 which was recorded twice by the District, overstating the accounts receivable and revenue as of June 30, 2011.
Page 318 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
ALBUQUERQUE PUBLIC SCHOOLS (CONTINUED)
2012-04 - Information Technology (Significant Deficiency) - Resolved
Condition: During our evaluation of internal controls over information technology (IT), it was noted that the District does not have an adequate internal control structure over information technology. The District is in the process of developing an IT strategic plan and establishing IT policies and standards; however, the following deficiencies were noted:
1) The district does not have a policy or procedure to periodically review established users to determine they are current, authorized and have the correct access rights. 2) Prior to December 2011, there was not a process for closing user rights when users terminate employment and there could be terminated employees that still have user rights. 3) There are no formal backup and recovery procedures, as they are in the process of being developed and tested.
2012-05 - Internal Controls Surrounding Capital Asset Management (Material Weakness) - Repeated-Updated
Condition: During our test work over capital assets we noted the following:
1) It was noted that accumulated depreciation on various assets when recalculated was understated by $33,706,770. This error occurred during the GASB 34 implementation in 2002 and was never corrected prior to entering the assets into Lawson. It was noted that current year depreciation expense was properly calculated.
2) At the end of June 30, 2012, the District reported to the State Auditors' Office assets totaling $1,893,074 in which the District deemed missing and removed from the asset listing. These assets were first identified as missing during the years of 2003 through 2009. The District established a policy June 30, 2010 to remove these assets from the listing if they were still missing after two years, these were removed in accordance with the policy; however, the district was unable to account for all of these assets.
2012-06 - Risk Management (Significant Deficiency) - Repeated- Updated
Condition: During internal control test work over the risk management function, the following items were noted:
1) Out of 38 risk payments tested, one payment in the amount of $247.38 that was processed and paid through accounts payable was never recorded in the APS QISS risk management software system. Neither the claim, which was a property claim, nor the single payment paid on the claim, was set up in the QISS risk tracking system. 2) During review of controls over claims reserves, it was noted that claims analysts have the ability to enter an unlimited case reserve amount per case without requiring management approval. Currently, the QISS risk management software does not require approval of case reserve amounts. In addition, it was noted that a report is not generated from the system that would show reserve amounts by case as a way to monitor reserves that have been set. However, it was noted that the Risk Management Department is currently working with the software company to add a control in the system that would require reserves entered in by a claims analyst over a certain amount to be approved by the risk management director.
Page 319 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
COMPONENT UNITS
21 sT CENTURY PUBLIC ACADEMY
FS 10-05 -Internal Control Structure (Significant Deficiency) - Repeated
Condition: During our field work we noted the following:
1) The fixed asset listing provided during our test work had included a cost variance of $7,500 compared to the financial statements in prior year; the school was unable to identify the reason for the variance. 2) During our search for unrecorded liabilities, we identified 2 disbursements subsequent to year end totaling approximately $25,000 that should have been accrued as accounts payable at year end, however, they were not identified by school as liabilities as of June 30,2012. 3) During our journal entry review, 4 out of 5 journal entries reviewed did not have evidence of principal review and approval.
2012-07 - OSA Audit Confidentiality (Compliance and Other Matters) - Resolved
Condition: During our review of the August 31, 2011 governing council minutes, it was noted that there was discussion of a specific audit finding for the FY 2011 Audit. At this time, the report had not yet been submitted and officially released by the State Auditor.
ACADEMIA DE LENGUA Y CUL TURA
2012-08 - Cash Control Standards/PED Cash Reporting (Significant Deficiency) - Repeated
Condition: During our field work, we noted the June 30,2012 bank reconciliation had a variance of $639 when compared to the final trial balance. In addition, the beginning balance on the cash report did not agree to the final cash balance from the audited June 30, 2011 financials. In addition, it was noted that the outstanding items included a check from December 1, 2010 for $586.52.
2012-09 - Internal Control Structure (Significant Deficiency) - Repeated
Condition: The school policy for cash disbursements requires the signature of the governing council president; however, it was noted that the school is not following this policy.
2012-10 - Internal Controls Surrounding Capital Asset Management (Significant Deficiency) - Repeated
Condition: During our test work over capital assets, we noted the following:
1) The school has capital assets totaling approximately $247,000 in original cost with a net book value of approximately $8,000 as of June 30, 2011; the school was unable to provide a detailed listing of these assets with the proper depreciation calculation for the current year. 2) The school was unable to determine if a physical inventory of the assets was performed as of June 30, 2012.
Page 320 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO.12 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
COMPONENT UNITS (CONTINUED)
CAREER ACADEMIC AND TECHNICAL ACADEMY
2012-11 - Procurement (Compliance and Other Matters) - Resolved
Condition: During our procurement test work, we noted contracts in the amount of $41,516 and $68,704 awarded which lacked evidence of an RFP process.
2012-12 - Operating Leases (Compliance and Other Matters) - Resolved
Condition: During our test work, we noted the school entered into an operating lease inappropriately on behalf of Albuquerque Public Schools.
CORRALES INTERNATIONAL CHARTER SCHOOL
FS 11-21 - Internal Control Structure (Significant Deficiency) - Repeated
Condition: During our field work, we noted the following:
4) A journal entry in which $85 was posted to function 1000 instead of function 2200 in fund 27106 and $3,900 was posted to function 4000 instead of function 1000 in fund 31700. 5) Fund 24106 was overdrawn by $47 and is due back to APS.
2012-13 - Travel and Per Diem (Compliance and Other Matters) - Resolved
Condition: During our review of 2 travel and per diem reimbursements, it was noted that on one of the reimbursements the employee was reimbursed at 100% of the IRS rate.
DIGITAL ARTS AND TECHNOLOGY ACADEMY
2012-14 - Travel and Per Diem (Compliance and Other Matters) - Resolved
Condition: During our review of 1 travel and per diem reimbursement, it was noted that on the last day of travel the employee was reimbursed for actual expenses of $38 instead of using the partial day per diem rates, in which the maximum amount is $30.
2012-15 - Timely Deposit of Cash Receipts (Compliance and Other Matters) - Resolved
Condition: During our review of 2 cash receipt batches, we noted 1 batch included a deposit that was not deposited within 24 hours of receipt as required.
FS 09-66 - Untimely Federal Reimbursement Back to Government (Compliance and Other Matters) - Resolved
Condition: We noted that the school has $88,853 of unspent fund sitting in cash from FY 2006 that they have not paid back to the state.
Page 321 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
COMPONENT UNITS (CONTINUED)
EL CAMINO REAL ACADEMY
2012-16 - Cash Control Standards (Compliance and Other Matters) - Resolved
Condition: During our review of cash controls, it was noted the checks of the charter school do not state "Void after one year" as required.
GORDON BERN ELL CHARTER SCHOOL
2012-17 - Reimbursement Requests (Compliance and Other Matters) - Repeated
Condition: During our audit, we noted a state reimbursement request for fund 31700 in the amount of $5,816 was not properly submitted and was subsequently disapproved. In addition, the fund has a deficit of $5,574 from a previous year in which the school was not reimbursed.
LA ACADEMIA DE ESPERANZA
FA 07-90 - Internal Control Structure (Significant Deficiency) - Resolved
Condition: During our test work, we noted material adjustments in excess of customary cash-modified accrual adjustments.
FA 07-97 - Budgetary Conditions (Compliance and Other Matters) - Repeated
Condition: The school has expenditure functions where actual expenditures exceeded budgetary authority:
IDEA B - Support Services - $146,758
2012-18 - Internal Controls Surrounding Capital Asset Management (Significant Deficiency) - Resolved
Condition: During our test work over fixed assets, we noted the following:
1) 2 assets in which depreciation was incorrectly calculated by approximately $3,600. 2) The fixed asset listing doesn't include placed-in-service dates for all assets. 3) Additions in current year incorrectly excluded installation and related costs to be included with the capitalized amount of the asset.
LA ACADEMIA DE ESPERANZA FOUNDATION
FS 11-32 - No Accounting Record (Significant Deficiency) - Resolved
Condition: The Foundation of the school does not have a chart of accounts or a general ledger. The Foundation also does not perform bank reconciliations.
Page 322 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
COMPONENT UNITS (CONTINUED)
MOUNTAIN MAHOGANY
2012-19 - Budgetary Conditions (Compliance and Other Matters) - Repeated
Condition: The School has expenditure functions where actual expenditures exceeded budgetary authority:
EMSI- Instruction - $243
2012-20 - Timely Deposit of Cash Receipts (Compliance and Other Matters) - Resolved
Condition: During our review of 1 cash receipt batch, we noted 6 receipts within the batch that were not deposited within 24 hours of receipt as required.
NATIVE AMERICAN COMMUNITY ACADEMY
FS 07-141 - Budgetary Conditions (Compliance and Other Matters) - Repeated
Condition: The School has expenditure functions where actual expenditures exceeded budgetary authority:
Operational - Instruction - $66,037 Operational- Support Services - $104,627 Operational- Non-Instructional Services - $48 Instruction Support - Instruction - $4,327 Food Services - Non-Instructional Services - $9,690 Title I - Support Services - $1,692 IDEA B - Support Services - $56,205 Kellogg Fund - Instruction - $882 Kellogg Fund - Support Services - $12,975 NM Community Foundation - Support Services - $31,922 2008 GO Bond Student Library Fund - Support Services - $799 Private Direct Grants - Support Services - $45,676 Public School Capital Outlay - Capital Outlay - $362,070 Capital Improvements - Support Services - $51,182
FS 08-106 - Budget Adjustment Requests (BAR) (Compliance and Other Matters) - Resolved
Condition: During our audit, we noted that not all of the awards in the Local and State Flow-Through Grants were properly budgeted based on the awarded amounts.
2012-21 - Cash Management/Cash Control Standards (Material Weakness) - Resolved
Condition: During our field work, we noted the following:
1) Monthly bank reconciliations were not performed in a timely manner consistently during the fiscal year. 2) The school incurred late/finance charges in the amount of $460 during the fiscal year as a result of untimely credit card payments and payments not made in full of the amount outstanding. 3) Due to inadequate budgeting and cash management, the school has fund balance deficits of $100,767 in the General Fund and $9,442 in the Food Services Fund as of June 30, 2012. Page 323 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
COMPONENT UNITS (CONTINUED)
NATIVE AMERICAN COMMUNITY ACADEMY (CONTINUED)
2012-22 - Agency Issued Credit Cards (Compliance and Other Matters) - Repeated
Condition: During our field work, we noted the school was utilizing credit cards issued to the school instead of P-Cards.
NUESTROS VALORES
FS 11-40 - Untimely Federal Reimbursement Back to Government (Compliance and Other Matters) - Resolved
Condition: We noted that the school has $3,267 of unspent funds in cash from FY 2010 that they have not paid back to the state.
FS 11-42 - Budgetary Conditions (Compliance and Other Matters) - Repeated
Condition: The school has expenditure functions where actual expenditures exceeded budgetary authority:
IDEA-B - Instruction - $21,067 Title I-Instruction - $1,373 Instruction Support - Support Services - $151 General Fund - Support Services - $70,488 General Fund - Food Services - $10,401
2012-23 - Untimely Reimbursement Requests (Significant Deficiency) - Repeated
Condition: During our audit, we noted within the food services fund that expenditures exceed revenue by $10,401; this was a result of USDA claims not being properly submitted within a timely manner. As a result, the school will be unable to claim those funds and the expenses were reclassified to the general fund.
2012-24 -Internal Control Structure (Significant Deficiency) - Repeated
Condition: During our test work, we noted numerous adjustments in excess of customary cash-modified accrual adjustments.
PUBLIC ACADEMY FOR PERFORMING ARTS
FS 11-43 -Internal Control Structure (Significant Deficiency) - Repeated
Condition: During our field work we noted the following:
1) The reported general ledger balances on the bank reconciliation for the operating account and the activity account had discrepancies of approximately $3k to the actual general ledger.
Page 324 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS June 30, 2013
SECTION 11- FINANCIAL STATEMENT FINDINGS (CONTINUED)
COMPONENT UNITS (CONTINUED)
ROBERT F. KENNEDY
FS 09-176 - Untimely Deposit of Cash Receipts (Compliance and Other Matters) - Repeated
Condition: During our review of 1 cash receipt batch, we noted 6 receipts within the batch that were not deposited within 24 hours of receipt as required.
FS 11-48 - Cash Control Standards (Compliance and Other Matters) - Repeated
Condition: During our review of the year-end bank reconciliation, it was noted that the outstanding items included 29 checks totaling $6,627.24 dated 6/30/11 and older. In addition, there was 1 outstanding deposit dated 3/28/11 for $29.
THE BATAAN MILITARY ACADEMY
FS 09-197 -Internal Controls over Disbursements (Compliance and Other Matters) - Repeated
Condition: During our budget test work, it was noted that $641 for the 2010 Library GO Bonds fund was incorrectly charged to support services.
Page 325 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS June 30, 2013
SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS
ALBUQUERQUE PUBLIC SCHOOLS
Finding FA 11-02 - Suspension and Debarment (Significant Deficiency, Compliance) - Resolved
Federal Program: Title I, Part A Cluster (CFDA #84.01 0/84.389A-ARRA)
Federal Agency: Department of Education
Condition: During our procurement test work, we noted that 5 of 5 vendors tested that were awarded contracts on the Title I grant were not checked for suspension and debarment.
Finding 2012-01 - Payroll (Significant Deficiency) - Repeated
Federal Program: Title I, Part A Cluster (CFDA # 84.010/84.389A-ARRA) IDEA - B Cluster (CFDA # 84.027/84.027A-ARRA and School Improvement Grant Cluster (84.377/84.388A-ARRA)
Federal Agency: Department of Education
Condition: During our payroll test work we noted the following:
1) Title I, Part A Cluster - 1 out of 40 payroll disbursements charged to the grant was identified as a journal entry to make a retroactive payroll correction. However, it was determined the payroll correction was corrected by both grants management and the payroll department. As a result of the duplication of this correction, the grant was over-charged $10,419. 2) IDEA - B Cluster - 1 out of 40 payroll disbursements charged to the grant was identified as a journal entry to make a retroactive payroll correction for an employee. However, during this retroactive correction the District also charged the grant for mentoring activities the employee was receiving compensation for, which should have been paid out of operations. The total amount incorrectly charged to the grant totaled $462. 3) School Improvement Grant - The District was unable to provide a time and effort certification for 1 out 40 disbursements tested.
2012-03 Financial Close and Reporting (Material Weakness) - Resolved *
Federal Program: National School Lunch Program (CFDA #10.555)
Federal Agency: Department of Agriculture
Condition: During our test work, we noted the following misstatements as of June 30, 2011 that required prior period adjustments:
1) It was determined that the May and June 2011 USDA claims for the National School Lunch Program (CFDA 10.555) totaling $2,535,198 were received and recognized as revenue in August 2012. However, they should have been accrued as an accounts receivable and recognized as revenue as of June 30, 2011.
2) It was determined that Fund 31300 included an accounts receivable in the amount of $442,766 which was recorded twice by the District, overstating the accounts receivable and revenue as of June 30, 2011.
*Please note that this finding is repeated - modified in the financial statement findings. However, the current year finding does not pertain to federal awards. Therefore, the finding is resolved in Section III - Federal Awards Findings and Questioned Costs.
Page 326 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 EXIT CONFERENCES June 30, 2013
EXIT CONFERENCES
The following details the exit conferences held for the District and each respective component unit, which includes the date and attendance of each exit conference. In addition, each exit conference was held in a closed meeting to preserve the confidentiality of the audit information prior to the official release of the financial statements by the State Auditor.
ALBUQUERQUE PUBLIC SCHOOLS
The following individuals were in attendance on October 25, 2013:
Dr. Donald Duran, Member, Finance Committee Chair Martin Esquivel, Board President Lorenzo Garcia, Member, Capital Outlay, Property and Technology Committee Chair Dr. Analee Maestas, Member, District and Community Relations Committee Chair Don Moya, Chief Financial Officer Steven Michael Queazda, Board Secretary Kathy Korte, Board Vice President, Audit Committee Chair Tami Coleman, Executive Director of Accounting Peg Koshmider, Director of Internal Audit Mike Wilson, Director of Risk Management Art Melendrez, Modrall Sperling Law Firm Brad Winter, Chief Operations Officer Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAllen LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAllen LLP Cammie Archuleta, Senior Associate, CliftonLarsonAllen LLP
21 ST CENTURY PUBLIC ACADEMY
The following individuals were in attendance on October 25, 2013:
Mary Tarango, Principal Dr. Donald Duran, Member, Finance Committee Chair Martin Esquivel, Board President Lorenzo Garcia, Member, Capital Outlay, Property and Technology Committee Chair Dr. Analee Maestas, Member, District and Community Relations Committee Chair Don Moya, Chief Financial Officer Steven Michael Queazda, Board Secretary Kathy Korte, Board Vice President, Audit Committee Chair Tami Coleman, Executive Director of Accounting Peg Koshmider, Director of Internal Audit Art Melendrez, Modrall Sperling Law Firm Brad Winter, Chief Operations Officer Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAllen LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAllen LLP Cammie Archuleta, Senior Associate, CliftonLarsonAllen LLP
Page 327 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 EXIT CONFERENCES June 30,2013
ACADEMIA DE LENGUA Y CUL TURA
The following individuals were in attendance on October 25, 2013:
Dr. Donald Duran, Member, Finance Committee Chair Martin Esquivel, Board President Lorenzo Garcia, Member, Capital Outlay, Property and Technology Committee Chair Dr. Analee Maestas, Member, District and Community Relations Committee Chair Don Moya, Chief Financial Officer Steven Michael Queazda, Board Secretary Kathy Korte, Board Vice President, Audit Committee Chair Tami Coleman, Executive Director of Accounting Peg Koshmider, Director of Internal Audit Art Melendrez, Modrall Sperling Law Firm Brad Winter, Chief Operations Officer Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP Cammie Archuleta, Senior Associate, CliftonLarsonAlien LLP
ALBUQUERQUE TALENT DEVELOPMENT SECONDARY CHARTER SCHOOL
The following individuals were in attendance on September 30, 2013:
Rommie Comp[ler, Principal Maureen Senetra, Vice-President, Governing Council Frank Barka, Secretary, Governing Council Carl R. Stenger IV, Member, Audit Committee Judy Bergs, Charter School Business Manager Mark Tolley, APS Charter/Magnet Schools Director Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
ALICE KING COMMUNITY SCHOOL
The following individuals were in attendance on September 30, 2013:
Tamara Henderson, Assistant Principal/Director Rhonda Cordova, Business Manager Jason Kugler, Audit Committee Chair R. J. Romero, APS Charter & Management Officer Judy Bergs, APS Charter School Business Manager Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
Page 328 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 EXIT CONFERENCES June 30, 2013
CHRISTINE DUNCAN HERITAGE ACADEMY
The following individuals were in attendance on October 1, 2013:
Jesus A. Moncada, School Principal Yolanda Sanchez, Business Manager Jacob Sanchez, Treasurer, Governing Council Chris Parrino, Member, Audit Committee Judy Bergs, APS Charter School Business Manager Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
CORRALES INTERNATIONAL CHARTER SCHOOL
The following individuals were in attendance on September 30, 2013:
Diane Gunn Miles, Business Manager Joe Marico, Member, Audit Committee Matt Peterson, Member, Audit Committee Judy Bergs, APS Charter School Business Manager Mark Tolley, APS Charter/Magnet Schools Director Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
DIGITAL ARTS & TECHNOLOGY
The following individuals were in attendance on September 30,2013:
Evelyn Hunemuller, CEO AI Sanchez, President, Member, Governing Council Michael Vigil, The Vigil Group, Business Manager Michael Vigil II, The Vigil Group, Business Manager Lynette Quintana, Assistant Business Manager Judy Bergs, APS Charter School Business Manager Mark Tolley, APS Charter/Magnet Schools Director Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
EL CAMINO REAL ACADEMY
The following individuals were in attendance on September 30, 2013:
Paym Greene, Principal Mary Scofield, Business Manager Mike Reid, Secretary, Treasurer, Governing Council Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
Page 329 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 EXIT CONFERENCES June 30,2013
GORDON BERN ELL CHARTER SCHOOL
The following individuals were in attendance on October 20, 2013:
Greta Roskam, Director Kristalyn Loftis, Business Manager Claudia Duran, Business Manager Curt Szarek, Member, Finance/Audit Committee Erik Bose, Board Member J.J. Griego, GPS Business Manager Tami Coleman, APS Executive Director of Accounting Judy Bergs, APS Charter School Business Manager Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
LA ACADEMIA DE ESPERANZA
The following individuals were in attendance on September 30, 2013:
Steve Wood, Principal Jama Sullivan, Business Manager Lee L. Farris, Board Member R. J. Romero, APS Charter & Management Officer Judy Bergs, APS Charter School Business Manager Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
LOS PUENTES CHARTER SCHOOL AND FOUNDATION
The following individuals were in attendance on October 1, 2013:
Donna "Lexi" Miles, Principal Patrick Kelly, Business Manager Doug Mitchell, Board Member Joan Stave ley, Board Member Judy Bergs, APS Charter School Business Manager Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
MONTESSORI OF THE RIO GRANDE/FRIENDS OF THE MONESSORI FOUNDATION
The following individuals were in attendance on October 1, 2013:
Bonnie M. Dodge, Principal Chris Parrino, Business and Finance Director Ryan Hieronymous, Member, Council and Foundation Judy Bergs, APS Charter School Business Manager Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
Page 330 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 EXIT CONFERENCES June 30, 2013
MOUNTAIN MAHOGANY COMMUNITY SCHOOL
The following individuals were in attendance on September 30,2013:
Balor Del Rosairo, Administrator Ina Rivera, Business Manager Delcie Dobrovolny, Member, President Brenda Bentley, Member, Governing Council Judy Bergs, APS Charter School Business Manager Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
NATIVE AMERICAN COMMUNITY ACADEMY
The following individuals were in attendance on September 30,2013:
Kara Bobroff, NACA Principal Rebekah Estrado, NACA Business Support Specialist Carmen Rodriguez, NACA Business Manager Judy Bergs, APS Charter School Business Manager Mark Tolley, APS Charter/Magnet Schools Director Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
NUESTROS VALORES CHARTER SCHOOL
The following individuals were in attendance on September 30,2013:
Monica Aguilar, Executive Director Rhonda Cordova, Business Manager Lawrence Chavez, Member, Audit Committee R. J. Romero, APS Charter & Management Officer Judy Bergs, APS Charter School Business Manager Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
PUBLIC ACADEMY FOR PERFORMING ARTS
The following individuals were in attendance on September 30, 2013:
Doreen Winn, Executive Director Rhonda Cordova, Business Manager Rebekah Weems, Counselor R. J. Romero, APS Charter & Management Officer Judy Bergs, APS Charter School Business Manager Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
Page 331 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 EXIT CONFERENCES June 30, 2013
ROBERT F. KENNEDY CHARTER SCHOOL
The following individuals were in attendance on October 20, 2013:
Robert D. Baade, Director Claudia Duran, Business Manager Roy Burton, Member, Finance Committee Michael Perez, Member, Finance Committee J.J. Griego, GPS Business Manager Judy Bergs, APS Charter School Manager Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
SCHOOL FOR INTEGRATED ACADEMICS & TECHNOLOGY
The following individuals were in attendance on September 30, 2013:
Erik Bose, Executive Director Curt Szarek, Business Manager Jacob Kennedy, Member, Governing Board/Audit Committee R. J. Romero, APS Charter & Management Officer Judy Bergs, APS Charter School Business Manager Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
SOUTH VALLEY ACADEMY
The following individuals were in attendance on September 30, 2013:
Katarina Sandoval, Principal Carmen Rodriguez, Business Manager Alicia Maldonado, President, Governing Council Judy Bergs, APS Charter School Business Manager Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
THE BATAAN MILITARY ACADEMY
The following individuals were in attendance on September 30, 2013:
Manuel Alzaga, Principal Jan Zink, Vice Principal Ned Keltner, Member, Finance Committee Judy Bergs, APS Charter School Business Manager Mark Tolley, APS Charter/Magnet Schools Director Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP Matt Bone, CPA, CGFM, Manager, CliftonLarsonAlien LLP
Page 332 STATE OF NEW MEXICO ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 EXIT CONFERENCES June 30, 2013
ALBUQUERQUE PUBLIC SCHOOLS FOUNDATION
The following individuals were in attendance on October 25, 2013:
Phil Casaus, Executive Director Jeff Lansford, Board Member Cathy Cavin, Resource Specialist Rachel Rios, Accountant Cheryl Burgman, Accountant Ann Lerner, Board Member, Finance Committee J.J. Griego, GPS Business Manager, Tresurer Georgie Ortiz, CPA, CGFM, Principal, CliftonLarsonAlien LLP
PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements for the primary government presented in this report have been prepared by management. The financial statements for the component units presented in this report have been prepared by the independent auditor. However, they are the responsibility of management, as addressed in the Independent Auditor's Report. Management reviewed and approved the financial statements.
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